GrafTech International Ltd (NYSE:GTI) is a $1.55 billion market cap manufacturer of a range of high quality graphite electrodes, products essential to the production of electric arc furnace steel and various other ferrous and nonferrous metals. After the company reported earnings on April 24, despite beating analyst estimates and proving bears wrong, the stock price still edged down. Amidst this unusual situation, several insiders took advantage of this to raise their exposure.
On April 25, Mary Cranston, Board Director, acquired 22,100 shares for $11.37 each, and now holds 79,040 shares (of which 77,040 are held directly, and another 2,000, through a trust). On that same date, three more Board Directors bought GrafTech’s stock.
Randy Carson procured 13,480 shares for $11.72 per share and now owns 73,388 shares of the company. Steven Shawley purchased 22,023 shares, and paid $11.35 per unit. His holdings now amount to 72,850 shares. Finally, Ferrell Mcclean bought 21,800 shares for $11.39 each. Following this transaction, Mr. Mcclean possesses 97,984 shares directly, and another 15,400, indirectly.
A few days later, on April 28, Randy Carson, another Board Director, acquired 13,480 GrafTech shares for $11.72 per share. He currently owns 73,388 shares of the company.
In addition to these insiders, several hedge funds are betting on this stock. As we reported a month ago, a few of them recently added GrafTech to their equity portfolios. This is the case of Peter Schliemann‘s Rutabaga Capital Management, Peter Muller´s PDT Partners and Israel Englander‘s Millennium Management, who bought 2.47 million shares, 258,589 shares, and 249,295 shares, respectively.
Among other shareholders are Chuck Royce’s Royce & Associates (the third largest shareholder owning 11.9 million shares or a 9% stake), Mario Gabelli’s GAMCO Investors (5.4 million shares) and John Overdeck and David Siegel’s Two Sigma Advisors (106,649 shares).
All of this bullishness can be understood only if one analyzes GrafTech’s growth prospects. Analysts expect it to outperform its peers over the long-term, delivering average annual EPS growth rates around 18%. For the shorter term, EPS growth is expected to come in at 87.50% this year, and 233.30% next year, mainly driven by a rationalization plan that aims to achieve $75 million of annual cost savings. This kind of growth potential coupled with a below-average valuation (1.1x P/S and 1.3x P/B), make of this stock an attractive investment option. With both insiders and major funds betting on this stock, it might be a time to buy.
Disclosure: Javier Hasse holds no position in any stocks mentioned