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Greg Goodman, the CEO of Goodman Group (ASX:GMG), Australia’s largest property business, has recently executed a substantial divestiture of shares in the company. Such insider selling often raises eyebrows among investors, as it can signal potential bad news or indicate that the stock may be fully valued—or even overvalued.
In the past two weeks, Goodman has conducted three significant sales. The latest occurred on September 20, when he sold 621,335 Goodman shares for total proceeds of AU$22.84 million, translating to an average selling price of approximately AU$36.76 per share. Prior to this, on September 17, he made two additional sales: the first involved 566,667 shares, generating AU$20.19 million at an average price of AU$35.63, and the second was for 333,333 shares, amounting to AU$11.88 million, also at about AU$35.63 per share. The company clarified that these shares were acquired upon the vesting of Goodman performance rights.
Given the timing of these sales—shortly after a remarkable 44% rise in Goodman’s share price since the beginning of 2024—investors might understandably be concerned. However, it’s important to note that insider sales do not always foreshadow negative developments. For instance, leaders at other companies like Pro Medicus Ltd (ASX:PME) and WiseTech Global Ltd (ASX:WTC) have similarly sold shares without adverse impacts on their respective stock performances.
Despite the recent sales, Greg Goodman retains significant ownership in the company, with approximately 37 million shares valued at around AU$1.34 billion. This substantial stake keeps him closely aligned with the interests of regular shareholders, meaning that any significant decline in the company’s performance would directly affect his wealth.
If these share sales were intended to diversify Goodman’s investment portfolio, that would be a prudent strategy. Diversification is a key principle in investing, aimed at mitigating risk by spreading investments across various assets.
From a financial perspective, Goodman Group's fiscal year 2024 results were robust, showcasing a 14% growth in operating earnings per security (EPS), reaching 107.5 cents. The company anticipates operating EPS growth of 9% for fiscal year 2025. In his remarks regarding the FY24 results, Goodman expressed optimism about the group’s future, highlighting the importance of active capital rotation in supporting sustained earnings growth while maintaining a prudent level of financial leverage.
Goodman also emphasized that while logistics remain central to the business, the data center sector is expected to be a major growth area moving forward. The company is currently engaged in negotiations for powered shell and fully fitted turnkey facilities, with significant projects expected to launch between now and the end of 2025.
