Mueller Industries' Record Earnings and Cash Balance: Sustainable Pricing Power or Cyclical Luck?

Mueller Industries reported record Q4 sales of $962.39 million and net income of $153.71 million, capping a record full year with $4.18 billion in sales and $765.19 million in net income. The company's combination of record profitability and a large cash and short-term investment balance of $1.39 billion has sparked interest in its pricing power and investment narrative. With a cyclical, metals-exposed manufacturer, investors should be comfortable with the company's high returns on equity and strong balance sheet. However, the stock's double-digit pullback over the past week suggests the earnings miss and talk of stretched valuation have reset near-term sentiment.