Have Insiders Sold AZEK Shares Recently?

Some The AZEK Company Inc. (NYSE:AZEK) shareholders may be a little concerned to see that the CEO, President & Director, Jesse Singh, recently sold a substantial US$1.1m worth of stock at a price of US$53.32 per share. However, that sale only accounted for 1.2% of their holding, so arguably it doesn't say much about their conviction.

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The Last 12 Months Of Insider Transactions At AZEK

Notably, that recent sale by CEO, President & Director Jesse Singh was not the only time they sold AZEK shares this year. Earlier in the year, they fetched US$47.42 per share in a -US$2.5m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$48.97. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 3.2% of Jesse Singh's holding.

All up, insiders sold more shares in AZEK than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. AZEK insiders own about US$145m worth of shares (which is 1.9% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The AZEK Insider Transactions Indicate?

Insiders haven't bought AZEK stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that AZEK is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing AZEK. While conducting our analysis, we found that AZEK has 1 warning sign and it would be unwise to ignore this.

But note: AZEK may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.