On September 12, 2023, Director Michael Tokarz sold 13,269 shares of Mueller Water Products, Inc. (MWA, Financial). This move comes amidst a year where the insider has sold a total of 17,458 shares and purchased none.
Michael Tokarz is a seasoned director at Mueller Water Products, Inc., a leading manufacturer and distributor of products and services used in the transmission, distribution, and measurement of water in North America. The company operates through three segments: Infrastructure, Technologies, and Mueller Co. Its products are used by municipalities, and the residential and non-residential construction industries.
The insider's recent sell-off raises questions about the company's current valuation and future prospects. Let's delve into the details.
The insider transaction history for Mueller Water Products, Inc. shows a clear trend of more sells than buys over the past year. There have been 4 insider sells and 0 insider buys in total. This could be a signal that insiders, including Tokarz, may perceive the stock as overvalued or expect a downturn.
On the day of the insider's recent sell, shares of Mueller Water Products, Inc. were trading for $13.08 apiece, giving the stock a market cap of $2.03 billion. The price-earnings ratio stands at 26.48, higher than the industry median of 21.84 but lower than the company’s historical median price-earnings ratio.
According to the GuruFocus Value, which is an intrinsic value estimate based on historical multiples, a GuruFocus adjustment factor, and future estimates of business performance, the stock is modestly undervalued. With a price of $13.08 and a GuruFocus Value of $14.52, Mueller Water Products, Inc. has a price-to-GF-Value ratio of 0.9.
While the insider's sell-off might raise eyebrows, the company's valuation suggests that the stock might still be a good buy for investors. However, potential investors should keep a close eye on the insider's future transactions and the company's performance to make informed decisions.
It's important to note that insider selling doesn't always indicate a bearish outlook. Insiders might sell shares for personal reasons or portfolio diversification. Therefore, while insider transactions can provide valuable insights, they should be considered as part of a broader investment strategy.
