Masco Insiders Sell US$6.0m Of Stock, Possibly Signalling Caution

In the last year, many Masco Corporation (NYSE:MAS) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Masco

Masco Insider Transactions Over The Last Year

The Group President of Plumbing Products, Jai Shah, made the biggest insider sale in the last 12 months. That single transaction was for US$2.0m worth of shares at a price of US$76.36 each. That means that an insider was selling shares at below the current price (US$77.55). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 63% of Jai Shah's stake.

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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Masco Insiders Are Selling The Stock

The last three months saw significant insider selling at Masco. In total, Independent Director Charles Stevens sold US$255k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Masco Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Masco insiders own 0.3% of the company, worth about US$58m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Masco Insiders?

An insider sold Masco shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. On the plus side, Masco makes money, and is growing profits. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Masco. At Simply Wall St, we found 1 warning sign for Masco that deserve your attention before buying any shares.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.