On June 30, 2023, Barbara Smith, Chairman and CEO of Commercial Metals Co (CMC, Financial), sold 50,000 shares of the company. This move is part of a larger trend, as over the past year, Smith has sold a total of 125,000 shares and made no purchases.
Commercial Metals Co is a leading manufacturer and marketer of steel and metal products, with operations in North America, Europe, and Asia. The company's core business includes manufacturing, recycling, and marketing steel and metal products, as well as related materials and services.
The insider transaction history for Commercial Metals Co shows a trend towards selling. Over the past year, there have been no insider buys and seven insider sells.
On the day of Smith's recent sale, shares of Commercial Metals Co were trading for $52.51 each, giving the company a market cap of $6.244 billion. The price-earnings ratio stands at 6.61, lower than both the industry median of 11.11 and the company's historical median price-earnings ratio.
The GuruFocus Value for Commercial Metals Co is $42.91, resulting in a price-to-GF-Value ratio of 1.22. This suggests that the stock is modestly overvalued.
The GF Value is an intrinsic value estimate developed by GuruFocus. It is calculated based on historical multiples (price-earnings ratio, price-sales ratio, price-book ratio, and price-to-free cash flow) that the stock has traded at, a GuruFocus adjustment factor based on the company’s past returns and growth, and future estimates of business performance from Morningstar analysts.
The recent sale by Barbara Smith, coupled with the overall insider selling trend, may raise questions among investors. However, it's important to note that insider selling does not necessarily indicate a negative outlook for the company. Executives sell shares for a variety of reasons, including personal financial planning needs. Investors should consider the broader context, including the company's fundamentals and market conditions, when interpreting insider transactions.
Despite the insider selling trend, Commercial Metals Co's lower-than-average price-earnings ratio and its position in the steel and metal industry could make it an attractive option for investors looking for value opportunities.
