GEF

Greif ($GEF) Insiders' Perfect Timing: March Low Buying, July High Selling... But Q3 Revenue Plunges 22%

11/17/2025 18:09

Greif Inc. ($GEF) is a global leader in industrial packaging, manufacturing steel, plastic, fiber containers and intermediate bulk containers (IBCs) for chemical, food & beverage, and pharmaceutical industries. With a market cap of $1.6 billion and 93% institutional ownership, the company offers a 3.67% dividend yield that attracts income investors. This year's insider trading patterns at Greif have provided remarkably insightful signals to investors, with executive transactions showing an almost uncanny correlation with stock price movements. The most striking activity occurred in March 2025. When shares plummeted from $58 in late February to the low $53s in mid-March, management and directors swooped in with coordinated buying. Director Andrew Rose purchased $300,000 worth of shares across March 5-6, while Director Mark Emkes bought $167,663 worth on March 6, and Director Frank Miller added $58,500 worth on March 11. Their buying timing nearly coincided with the year's low point, and shares indeed recovered to the mid-$55s by May. However, a completely different picture emerged in June and July. As shares spiked to $64.14 on June 9, President Ole Rosgaard immediately sold $1.98 million worth for a new home purchase. When shares hit their 2025 high of $69.16 on July 1, Rosgaard sold an additional $1.34 million. EVP Gary Martz dumped $1.99 million worth, while SVP Kimberly Kellermann sold $608,000 during this period. Interestingly, EVP Lawrence Hilsheimer took a contrarian approach, executing complex transactions on July 8 by simultaneously buying $67,000 and selling $69,000 worth of shares near the peak, indicating portfolio rebalancing rather than directional betting. November brought even more sophisticated patterns. Hilsheimer sold $2.02 million on November 11, then immediately bought back $1.42 million the next day, followed by another $563,000 purchase on November 13. Martz showed similar behavior, selling $302,000 then buying $329,000. These complex transactions likely relate to tax optimization or equity compensation programs. Beyond insider activity, Greif completed a significant strategic restructuring by selling its containerboard business to Packaging Corporation of America in July. This divestiture allows focus on core industrial packaging operations, with management revising 2025 adjusted EBITDA guidance to $507-517 million post-sale. Earnings results have been mixed. Q2 2025 delivered $1.19 per share, beating the $1.11 estimate, but Q3 disappointed with a 22% revenue decline and $1.03 per share versus $1.25 expected. The Q3 revenue drop to $1.13 billion year-over-year is particularly concerning. Industry-wide risks emerged in late July when class action lawsuits were filed against cardboard manufacturers including International Paper, alleging price-fixing conspiracy that inflated containerboard prices by 30% since late 2020. While Greif isn't a direct defendant, industry-wide pricing practice scrutiny creates indirect concerns. Financially, the company maintains solid health with a 45.66% debt-to-equity ratio and $257 million cash reserves, ensuring adequate liquidity. However, the 4.79% operating margin remains low, highlighting profitability improvement needs. Valuation presents mixed signals. The P/E ratio of 25.23x is significantly elevated from historical 13-17x range, while the 0.53x price-to-sales suggests undervaluation relative to revenue. EV/EBITDA of 6.59-9.54x appears reasonable for the sector. Key forward-looking factors include Q4 results showing containerboard divestiture impact and whether insiders' March buying or June-July selling proves prescient. The cardboard price-fixing litigation outcome also bears watching. For investors, a cautious approach seems warranted. While insider buying at lows and selling at highs demonstrates impressive market timing, recent earnings weakness and revenue declines raise concerns. The 3.67% dividend yield is attractive, but the 89% payout ratio leaves limited room for growth without earnings improvement.