Some Masco Corporation (NYSE:MAS) shareholders may be a little concerned to see that the Group President of Plumbing Products, Jai Shah, recently sold a substantial US$1.6m worth of stock at a price of US$62.38 per share. That's a big disposal, and it decreased their holding size by 42%, which is notable but not too bad.
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In fact, the recent sale by Jai Shah was the biggest sale of Masco shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of US$63.43, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 42%of Jai Shah's holding.
Insiders in Masco didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Masco insiders own 0.4% of the company, worth about US$59m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
An insider hasn't bought Masco stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But since Masco is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Masco. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Masco.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
What are the risks and opportunities for Masco?
Masco Corporation designs, manufactures, and distributes home improvement and building products in North America, Europe, and internationally. Show more
Trading at 0.7% below our estimate of its fair value
Earnings are forecast to grow 5% per year
Significant insider selling over the past 3 months
Has a high level of debt
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Masco Corporation designs, manufactures, and distributes home improvement and building products in North America, Europe, and internationally.
Established dividend payer and good value.
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