Mueller Industries Insiders Sell US$21m Of Stock, Possibly Signalling Caution

In the last year, many Mueller Industries, Inc. (NYSE:MLI) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Mueller Industries

Mueller Industries Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chairman of the Board & CEO, Gregory Christopher, for US$7.0m worth of shares, at about US$70.55 per share. That means that an insider was selling shares at slightly below the current price (US$79.36). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 6.4% of Gregory Christopher's holding.

Mueller Industries insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Mueller Industries better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Mueller Industries Insiders Are Selling The Stock

The last three months saw significant insider selling at Mueller Industries. In total, Independent Director John Hansen sold US$83k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of Mueller Industries

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Mueller Industries insiders own 2.5% of the company, currently worth about US$224m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Mueller Industries Tell Us?

An insider sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. Of course, the future is what matters most. So if you are interested in Mueller Industries, you should check out this free report on analyst forecasts for the company.

But note: Mueller Industries may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.

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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.