Masonite: 5 Different Insiders Have Sold Shares This Month

Dec.30.13 | About: Masonite International (DOOR)

In this article, I will feature one industrial stock that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

Masonite International Corporation (NYSE:DOOR) manufactures and markets interior and exterior door products worldwide.

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Insider selling during the last 30 days

Here is a table of Masonite's insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Gail Auerbach SVP Dec 9-24 6,000 Yes 24,331 shares 19.8%
Mark Erceg CFO Dec 18 12,095 Yes 68,090 shares 15.1%
Oaktree Capital 10% Owner Dec 17 300,497 No 4,477,837 shares 6.3%
Lawrence Repar COO Dec 9 7,500 Yes 39,344 shares 16.0%
Glenwood Coulter EVP Dec 2 2,000 Yes 109,054 shares 1.8%
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There have been 328,092 shares sold by insiders during the last 30 days. More details about the Rule 10b5-1 trading plan can be found from this link.

Insider selling by calendar month

Here is a table of Masonite's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
December 2013 328,092 0
November 2013 114,417 0
October 2013 103,635 0
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There have been 546,144 shares sold, and there have been zero shares purchased by insiders since October 2013. The month of December has seen the most insider selling.

Financials

Masonite reported the third-quarter financial results on November 6 with the following highlights:

Revenue $433.1 million
Net income $3.6 million
Cash $113.2 million
Debt $378.0 million
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(Source: Earnings presentation)

Outlook

Market indicators remain positive, but choppiness is expected.

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(Source: Earnings presentation)

Competition

The North American door industry is highly competitive and includes a number of global and local participants. In the U.S. residential interior door market, the primary participants are Masonite and JELD-WEN which are the only vertically integrated manufacturers of door facings. There are also a number of smaller competitors in the residential interior door market that primarily source door facings from third party suppliers. In the U.S. residential exterior door market, the primary participants are Masonite, JELD-WEN, Plastpro, and Therma-Tru. In the U.S. non-residential building construction door market, the primary participants are Masonite, VT Industries, Graham Wood Doors and Eggers Industries. Competition in these markets is primarily based on product quality, design characteristics, brand awareness, service ability, distribution capabilities, and value.

Conclusion

There have been five different insiders selling Masonite, and there have not been any insiders buying Masonite during the last 30 days. Three of these five insiders decreased their holdings by more than 10%. Masonite has an insider ownership of 2.10%.

Masonite is trading at a forward P/E ratio of 81.16, and the company has a book value of $28.41 per share. Before entering short Masonite, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are high P/E ratio, and the intensive insider-selling activity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.