On May 25, 2023, J Donahue, Chairman, President & CEO of Federated Hermes Inc (FHI, Financial), sold 100,000 shares of the company's stock. This recent transaction is part of a series of insider sales by J Donahue over the past year, during which he has sold a total of 434,008 shares and purchased 0 shares.
Who is J Donahue?
J Donahue is the Chairman, President, and CEO of Federated Hermes Inc, a leading global investment manager. He has been with the company for many years and has played a significant role in shaping its growth and success. Under his leadership, Federated Hermes has expanded its product offerings and increased its assets under management.
Federated Hermes Inc's Business Description
Federated Hermes Inc is a global investment manager that provides world-class investment management services and solutions to institutions, financial intermediaries, and individual investors. The company offers a diverse range of investment products, including equity, fixed-income, alternative, and money market funds. With a strong commitment to responsible investing, Federated Hermes focuses on delivering long-term, sustainable returns for its clients.
Insider Trends
The insider transaction history for Federated Hermes Inc reveals that there have been no insider buys over the past year. In contrast, there have been 32 insider sells during the same period. This trend suggests that insiders may be taking advantage of the stock's current valuation to realize gains.
Valuation
On the day of J Donahue's recent sale, shares of Federated Hermes Inc were trading at $35.37 apiece, giving the stock a market cap of $3,228.061 million.
The price-earnings ratio is 12.74, which is lower than the industry median of 13.15 and lower than the company's historical median price-earnings ratio. This indicates that the stock may be undervalued compared to its peers and its historical valuation.
With a price of $35.37 and a GuruFocus Value of $40.44, Federated Hermes Inc has a price-to-GF-Value ratio of 0.87. This suggests that the stock is modestly undervalued based on its GF Value.
The GF Value is an intrinsic value estimate developed by GuruFocus, calculated based on the following three factors:
- Historical multiples (price-earnings ratio, price-sales ratio, price-book ratio, and price-to-free cash flow) that the stock has traded at.
- A GuruFocus adjustment factor based on the company's past returns and growth.
- Future estimates of business performance from Morningstar analysts.
Analysis of Insider Buy/Sell and Relationship with Stock Price
The recent insider sell by J Donahue, along with the overall trend of insider sells over the past year, may raise concerns for some investors. However, it is essential to consider the stock's current valuation and the fact that it appears to be modestly undervalued based on its GF Value. This suggests that the stock may still have room for growth, despite the recent insider selling activity.
Investors should keep an eye on the company's financial performance and any changes in the insider transaction trends. While insider selling can sometimes signal a lack of confidence in a company's future prospects, it is also possible that insiders are merely taking advantage of the stock's current valuation to realize gains. As always, it is crucial for investors to conduct thorough research and consider multiple factors before making any investment decisions.
