Stock Analysis

Have Insiders Sold The AZEK Company Inc. (NYSE:AZEK) Shares Recently?

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NYSE:AZEK
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Anyone interested in The AZEK Company Inc. (NYSE:AZEK) should probably be aware that the President of Residential Segment, Jonathan Skelly, recently divested US$477k worth of shares in the company, at an average price of US$23.83 each. However, the silver lining is that the sale only reduced their total holding by 9.0%, so we're hesitant to read anything much into it, on its own.

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The Last 12 Months Of Insider Transactions At AZEK

Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Chairman of the Board Gary Hendrickson for US$501k worth of shares, at about US$18.47 per share. We do like to see buying, but this purchase was made at well below the current price of US$21.64. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months insiders purchased 35.15k shares for US$651k. But insiders sold 20.00k shares worth US$477k. In total, AZEK insiders bought more than they sold 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!

insider-trading-volume
NYSE:AZEK Insider Trading Volume March 18th 2023

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. AZEK insiders own about US$92m worth of shares. That equates to 2.8% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About AZEK Insiders?

An insider sold AZEK shares recently, but they didn't buy any. In contrast, they appear keener if you look at the last twelve months. We like that insiders own a fair amount of the company. So we're not overly bothered by recent selling. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 2 warning signs with AZEK and understanding them should be part of your investment process.

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, but not derivative transactions.

What are the risks and opportunities for AZEK?

The AZEK Company Inc. engages in manufacturing and selling of building products for residential, commercial, and industrial markets in the United States.

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Rewards

  • Earnings are forecast to grow 58.72% per year

Risks

  • Significant insider selling over the past 3 months

  • Profit margins (2.5%) are lower than last year (8.1%)

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