Insider Sells $7 Million in Karman Stock Amid 100% Rally and Record Earnings

Michael Willis, the chief financial officer of California-based Karman Holdings Inc. (NYSE:KRMN), executed an open-market sale of 115,000 shares of the aerospace and defense company on Monday, according to a regulatory filing.

Transaction Summary

The transaction value is based on the weighted average purchase price ($58.63); the post-transaction value is based on Wednesday prices.

Key Questions

How does the size of this transaction compare to Willis Michael’s prior disposition activity?
This 115,000-share sale is the largest open-market transaction executed by Willis' in the past year. He also sold 100,000 shares in July and 72,727 shares in February.

What is the market context for the sale price achieved in this transaction?
The shares were sold at a weighted average price of $58.63 per share. On Monday, shares of Karman Holdings Inc. closed at $58.28. The executed sale price was within 0.6% of the closing price that day, reflecting minimal intraday price impact.

What is Willis' remaining ownership and option exposure following this sale?
After this transaction, Willis holds 859,709 shares of Karman indirectly. There was no direct ownership reported.

Company Overview

Company Snapshot

Karman Holdings Inc. operates at scale within the aerospace and defense sector, leveraging advanced engineering and manufacturing capabilities to deliver specialized solutions for high-consequence missions. More specifically, the firm designs, manufactures, and supplies mission-critical systems for missile and defense, space programs, hypersonics, and launch vehicles, including metallic and composite flight hardware, payload protection, aerodynamic interstage, and propulsion systems. The company’s strategy centers on providing integrated, high-performance hardware and systems for demanding applications in space and defense. Its competitive advantage lies in its expertise across metallic and composite assemblies, supporting customers with end-to-end solutions in rapidly evolving markets.

Customers include major defense contractors, government agencies, and commercial space companies seeking advanced flight hardware and integrated mission-critical systems.

Foolish Take

Insider selling like this should be assessed in the context of a company’s execution and share-price trajectory—especially for a rapidly growing firm like Karman. The defense contractor has seen its stock double this year (up 103%) amid record earnings. In that context, CFO Mike Willis’ latest sale looks more like personal portfolio management than a signal about fundamentals.

Willis sold 115,000 shares at a weighted average price of $58.63, making this his largest open-market transaction of the past year. The move follows two earlier sales—100,000 shares in July and 72,727 in February—but leaves him with meaningful indirect exposure: 859,709 shares held through a trust of which he's the primary beneficiary. Willis has been Karman's CFO since 2022, and he has no reported stock sales before this year.

The disposition landed as Karman posted record quarterly results, including 42% revenue growth to $121.8 million, a 78% jump in net income to $7.6 million, and a $758.2 million funded backlog. The firm also provided full-year revenue guidance of $463 million to $468 million and said it expects revenue to grow up to 25% next year. For long-term investors, the bigger picture is in the operational momentum—not insider transactions like this one.

Glossary

Open-market sale: The sale of securities on a public exchange, available to any investor, at prevailing market prices.
Disposition: The act of selling or otherwise transferring ownership of an asset or security.
Direct holdings: Securities owned outright by an individual, not through a trust, fund, or other intermediary.
Form 4: A required SEC filing that discloses insider trades of company stock by officers, directors, or major shareholders.
Weighted average purchase price: The average price per share calculated by weighting each purchase price by the number of shares bought or sold at that price.
Intraday price impact: The effect a trade has on a stock's price within the same trading day.
Option exposure: The potential financial impact or risk associated with holding stock options, reflecting possible gains or losses.
Capacity factors: Variables that determine the maximum size or amount of a transaction, often based on available holdings.
Liquidation: The process of converting assets or holdings into cash, often by selling all positions.
Mission-critical systems: Products or solutions essential to the success or safety of key operations, especially in aerospace or defense.
Composite flight hardware: Aerospace components made from advanced composite materials, designed for strength and reduced weight.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.