Masco Corporation (MAS): Is This Insider Trading a Scary Sign?

After opening Tuesday at around $36.6, Masco Corporation (NYSE:MAS) stock surged to as high as $37.06. It then made a downturn, dipping as low as $36.41. Although the stock bounced a bit into the close, it finished the day at $36.78, up 0.55 points or 1.52 percent on the day. The final volume for the day was 5.184 million, which was more than its average volume. The firm is left with a market cap of $11.1 billion and now has 302.26 million shares outstanding. Masco Corporation (MAS) stock has gained 12.96 percent of market value in 21 trading days.

MAS stock has a trailing 3-year beta of 1.4, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $1.96 a share in the trailing twelve months. The stock’s value has surged 25.79 percent year to date (YTD) against a decline of -12.7 percent in 12 month’s time. The company’s shares still trade -15.82 percent away from its 1-year high of $43.69 and 36.07 percent up from 52-week low of $27.03. The average consensus rating on the company is 1.9, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Masco Corporation (MAS) will probably climb 2.66 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $44 price as 12-month high target. This represents a whopping 19.63 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $40, which represents a return potential of 8.75 percent when compared to the closing price of the stock of $36.78 on Tuesday, February 12. The lowest price target for the stock is $34 — slightly more than -7.56 percent from MAS’s current share price.

History has shown that shares in Masco Corporation have gone up on 19 different earnings reaction days and are predicted to add 0.05 percent when the company reports upcoming earnings. Investors will get their next glimpse of MAS’s Q1 earnings on April 23. Analysts are forecasting revenue to climb 7.2 percent to $2.01B in the fiscal first quarter, while earnings are seen soaring by nearly 27.27 percent to $0.56 per share. It earned $0.65 per share, worse than the $0.7, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $2.04B, better than the $2.01B analysts expected. Earnings are estimated to increase by 47.4 percent this year, 10.06 percent next year and continue to increase by 14.31 percent annually for the next 5 years.

Let’s take a look at some insider activity at Masco Corporation (NYSE:MAS) and see the pattern. The earliest insider trade took place on 11/19/2018. Manoogian Richard A parted with a total of 100 thousand shares of company at average share price of $30.98. The total for the sales was set at $3.1 million. After this transaction, the Director account balance stood at 525.96 thousand shares. The stock grew 18.72 percent since that insider sale. On 11/13/2018, O’Reagan Richard A., Group President, sold 12.9 thousand shares at a price per share of $31.48. This removed 406.09 thousand shares from the insider’s fortune and the stock saw a 16.84 percent rally in value since the news became public. This transaction left 61.44 thousand shares in the Group President account.

On 11/08/2018, Director Manoogian Richard A performed a sale transaction worth $1.57 million. This sale at $31.3 each has eliminated 50 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded 17.51 percent increase since the transaction was reported. The insider now is left with 525.96 thousand shares remaining in the account. Manoogian Richard A, who performs the Director job, sold 150 thousand shares for $4.61 million. The disposal occurred on 11/02/2018 was priced at $30.74 per share. The share price soared 19.65 percent since the reporting date. Manoogian Richard A now left with a stake of 525.96 thousand MAS stock worth $19.34 million after the insider selling.

The stock is currently hovering around the first support level of $36.44. Below this, the next support is placed in the zone of $36.1. Till the time, the MAS stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 79.01 on daily chart, which may remain a cause for concern. If the price breaks below $36.1 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $37.09 mark may result into a pull-back move towards $37.4 level.

Shares of Masco Corporation (MAS) are trading at a P/E ratio of 15.25 times earnings reported for the past 12 months. The industry MAS operates in has an average P/E of 23.78. Its P/E ratio went as low as 9.7X and as high as 27.42 over the 5-year span.Further, it is sporting a 1.36 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.17. 32.4 percent is the gross profit margin for Masco Corporation and operating margin sits at 14.8 percent. Along with this, the net profit margin is 8.9 percent.