We recently published a list of 10 Small–Cap Stocks Insiders Are Selling Recently. In this article, we are going to take a look at where Getty Images Holdings, Inc. (NYSE:GETY) stands against other small–cap stocks insiders are selling recently.
Why are some investors focusing on stocks with smaller market capitalizations? Among some of the reasons are diversification of their portfolios, because small-cap stocks usually operate in different industries than large-cap companies. Another reason is the share price, which is often lower than that of companies with larger market capitalization (above $10 billion), making them more affordable.
Some investors’ strategy is finding nascent companies with strong growth potential, which can bring high returns once the companies have grown. Even though small-cap stocks often carry higher risks and are more prone to market volatility, they also offer investors more room for growth.
What are some ways to assess small-cap stocks that are worth investing in? While there’s no single simple or complicated rule that investors can follow to achieve secure results, some strategies can help. One strategy is to keep track of insider trading activity. Insiders or, in other words, people in high positions within companies, such as CEOs, CFOs, directors and other executives have valuable insights into the company’s strategic moves, plans, and initiatives. A CEO’s investment in a company’s stock can sometimes signal strong confidence in the company’s future.
Does this mean that it is a bad sign for the company when insiders sell their shares? Not necessarily; just like insider buying activity doesn’t always mean stock is heading for growth. When insiders are selling their shares, it can sometimes mean that the management is losing confidence. On the other hand, it also happens that large shareholders just want to trim their holdings to more appropriate position sizes based on the risk/reward. Insiders can also decide to sell their shares due to personal financial reasons that have nothing to do with the company.
While both insider selling and buying can be driven by various motives, it’s important to consider these moves within the broader context of the company’s fundamentals, industry trends, and overall market conditions.
To identify the 10 large-cap stocks insiders are selling recently, we considered only stocks with a market capitalization of between $250 million to $2 billion. We first used Insider Monkey’s insider trading stock screener and looked for stocks with at least two insiders selling over the last two months.
With each stock we note the number of recent insider sales and the company’s current market capitalization. But why is it important to follow insider activity? Our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds, focusing on insider trading and stock picks from hedge fund investor newsletters and conferences. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A professional photographer capturing a visually intriguing lifestyle shot.
Getty Images Holdings, Inc. (NYSE:GETY)
Number of insiders selling: 7
Market capitalization: $1.175B
Getty Images Holdings, Inc. (NYSE:GETY), a leading global provider of premium visual content and services, operates under three popular brands – Getty Images, iStock, and Unsplash+. It provides a wide collection of high-quality images and videos to media businesses and various creative experts across the globe. Getty Images collaborates with over 576,000 content creators and more than 340 content partners to deliver this comprehensive content.
In December, seven insiders, including CEO, and CFO, sold a total of around $211,220 worth of the company’s shares at an average price of $2.29 per share. The stock is currently trading at $2.72 per share. Since the beginning of the year, Getty shares have gained 25.23%. On December 30, the stock reached its lowest price of $2.10, so it is possible that insiders were expecting this drop and wanted to sell some of their holdings beforehand.
Earlier in December, the company announced a strategic engagement with Clarifai, a global provider of AI orchestration and development and pioneer of the full‑stack computer vision platform. Then, in January, Getty confirmed it will merge with another visual content gian – Shutterstock (NYSE:SSTK). The combined company, which would have an enterprise value of approximately $3.7 billion, will be named Getty Images Holdings, Inc and will continue to trade on the New York Stock Exchange under the ticker symbol “GETY.” The news caused Getty Images share to jump to $3.19 per share that day.
How do analysts feel about Getty Images (NYSE:GETY)? SeekingAlpha’s analyst Andriy Blokhin writes that even though the merger aims to achieve $150-$200 million in cost savings and potentially improve margins there are some areas of concern such as stagnating content sales amid AI competition.
On the other hand, as per data from StockAnalysis, five analysts have an average “Buy” rating on the stock, with a 12-month price target of $5.61, representing an increase of 106.25% from the latest price.
In the third quarter of 2024, the company had revenue of $240.5 million, an increase of 4.9% year-over-year. Net loss amounted to $2.5 million, compared to net loss of $18.4 million in the same quarter of 2023. Furthermore, the company has experienced nine consecutive quarters of strong double-digit growth in its annual subscriber base. This growth has been fueled by the success of its e-commerce platforms, particularly iStock and Unsplash+, which have attracted new customers from target growth markets across EMEA, APAC, and the Americas and supported the company’s geographic expansion strategy. The company’s subscription business contributed to more than 50% of its total revenue in the quarter.
Getty Images (NYSE:GETY) is also one of the 10 Best Affordable Stocks Under $5 to Buy Now.
Overall, GETY ranks 7th on our list of small–cap stocks insiders are selling recently. While we acknowledge the potential of GETY, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GETY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
