What Happened?
Shares of industrial fluid and energy systems manufacturer Graham Corporation (NYSE: GHM) jumped 7.1% in the afternoon session after an insider, Gregorio Mauro, purchased 1,200 shares of the company's stock, signaling confidence in the firm's future.
The transaction, valued at approximately $58,812, represented a notable open-market purchase. Such buys from company insiders are often viewed by investors as a positive sign, suggesting that those with intimate knowledge of the business believe the shares are undervalued or poised for growth.
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What Is The Market Telling Us
Graham Corporation’s shares are very volatile and have had 25 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 11 months ago when the stock dropped 22.2% on the news that the company reported underwhelming fourth quarter results: its revenue missed and its full-year revenue guidance fell slightly short of Wall Street's estimates.
Orders fell significantly, reflecting the lumpiness of large capital projects, particularly in defense, which could impact near-term revenue growth. Backlogs, another leading growth indicator, declined sequentially and relative to the the previous year, suggesting the near-term sales momentum might be weaker.
Despite these challenges, Graham Corporation beat analysts' EBITDA and EPS expectations this quarter, partially offsetting the otherwise underwhelming results.
Graham Corporation is up 56.2% since the beginning of the year, and at $68.94 per share, has set a new 52-week high. Investors who bought $1,000 worth of Graham Corporation’s shares 5 years ago would now be looking at an investment worth $4,687.
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