On July 31, 2023, Phillip Creek, the former Vice President and CFO of M/I Homes Inc (MHO, Financial), sold 53,466 shares of the company. This move is part of a series of transactions Creek has made over the past year, during which he sold a total of 78,668 shares and made no purchases.
Phillip Creek has been a significant figure in M/I Homes Inc, a leading national homebuilder and developer that has been in operation for over 40 years. The company is committed to building high-quality, energy-efficient homes in prime locations throughout the country. M/I Homes Inc's business model focuses on the construction and sale of single-family residential homes, with operations spread across the Midwest, Mid-Atlantic, and Southern regions of the United States.
The insider transaction history for M/I Homes Inc shows a trend towards selling rather than buying. Over the past year, there have been 24 insider sells and no insider buys. This could be indicative of the insiders' perception of the company's future prospects.
On the day of Phillip Creek’s recent sell, shares of M/I Homes Inc were trading for $100.01 apiece, giving the stock a market cap of $2.77 billion. The price-earnings ratio is 5.83, which is lower than the industry median of 9.09 and lower than the company’s historical median price-earnings ratio. This suggests that the stock is undervalued when compared to its peers and its own historical data.
However, the GuruFocus Value of M/I Homes Inc stands at $65.79, resulting in a price-to-GF-Value ratio of 1.52. This indicates that the stock is significantly overvalued based on its GF Value.
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 discrepancy between the price-earnings ratio and the GF Value suggests a complex picture for M/I Homes Inc. While the stock appears undervalued based on its price-earnings ratio, the GF Value indicates significant overvaluation. This could be a signal for investors to exercise caution and conduct further research before making investment decisions.
The sale of shares by Phillip Creek, coupled with the overall trend of insider selling, may also be a factor for potential investors to consider. While insider selling is not always a negative sign, it is worth noting in the context of the company's valuation and market performance.
As always, potential investors should conduct their own thorough research and consider multiple factors before making investment decisions.
