Consumer Durables News

Selling US$852k worth of M/I Homes, Inc. (NYSE:MHO) stock at high prices would have gotten insiders a handsome reward


Even though M/I Homes, Inc. (NYSE:MHO) stock gained 17% last week, insiders who sold US$852k worth of stock over the past year are probably better off. Selling at an average price of US$46.58, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

However if you’d rather see where the opportunities and risks are within MHO’s industry, you can check out our analysis on the US Consumer Durables industry.

The Last 12 Months Of Insider Transactions At M/I Homes

The Chairman, Robert Schottenstein, made the biggest insider sale in the last 12 months. That single transaction was for US$852k worth of shares at a price of US$46.83 each. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$41.58). So it may not shed much light on insider confidence at current levels. Robert Schottenstein was the only individual insider to sell shares in the last twelve months.

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!

NYSE:MHO Insider Trading Volume October 5th 2022

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

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company 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 M/I Homes insiders own 2.4% of the company, worth about US$28m. 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 M/I Homes Insiders?

It doesn’t really mean much that no insider has traded M/I Homes shares in the last quarter. We don’t take much encouragement from the transactions by M/I Homes insiders. The modest level of insider ownership is, at least, some comfort. So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 1 warning sign for M/I Homes that deserve your attention before buying any shares.

But note: M/I Homes 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, but not derivative transactions.

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.

Valuation is complex, but we’re helping make it simple.

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