On June 27, 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 trend for Smith, who over the past year has sold a total of 75,000 shares and purchased none.
Commercial Metals Co is a manufacturing company that primarily produces and recycles steel and metal products. The company operates globally, with a significant presence in the United States, Poland, and other international markets. Its products are used in the construction, industrial, and fabrication sectors.
The sale by Smith is noteworthy as it comes amidst a broader trend of insider selling at Commercial Metals Co. Over the past year, there have been six insider sells and no insider buys. This trend is illustrated in the following image:
On the day of Smith's recent sale, shares of Commercial Metals Co were trading at $50.65, giving the company a market cap of $5.965 billion. The price-earnings ratio was 6.44, lower than both the industry median of 10.85 and the company's historical median price-earnings ratio.
According to GuruFocus Value, which is an intrinsic value estimate based on historical multiples, a GuruFocus adjustment factor, and future business performance estimates, Commercial Metals Co is modestly overvalued. The stock's price-to-GF-Value ratio is 1.17, with a GF Value of $43.44. This valuation is depicted in the following image:
The insider selling trend at Commercial Metals Co, coupled with the company's modest overvaluation, may suggest that insiders believe the stock's current price does not fully reflect its intrinsic value. However, investors should always conduct their own research and consider multiple factors before making investment decisions.
It's also worth noting that while insider selling can sometimes be a bearish signal, it can also be driven by personal financial needs or portfolio diversification strategies. Therefore, it's essential to consider the broader context and not base investment decisions solely on insider trading activity.
