Trex Company Insiders Sold US$2.1m Of Shares Suggesting Hesitancy

In the last year, many Trex Company, Inc. (NYSE:TREX) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Trex Company

Trex Company Insider Transactions Over The Last Year

The Senior VP & Chief Human Resources Officer, Jacob Rudolph, made the biggest insider sale in the last 12 months. That single transaction was for US$1.5m worth of shares at a price of US$90.90 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$72.76). So it may not shed much light on insider confidence at current levels. Notably Jacob Rudolph was also the biggest buyer, having purchased US$7.7k worth of shares.

In total, Trex Company insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Are Trex Company Insiders Buying Or Selling?

Senior VP & Chief Human Resources Officer Jacob Rudolph bought just US$2.4k worth of shares in that time. That's not much at all. So it is hard to draw any conclusion about how insiders are feeling about the stock, from these recent trades.

Insider Ownership Of Trex Company

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Trex Company insiders own about US$37m worth of shares. That equates to 0.5% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Trex Company Insider Transactions Indicate?

We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. Our analysis of Trex Company insider transactions leaves us cautious. But it's good to see that insiders own shares in the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. In terms of investment risks, we've identified 1 warning sign with Trex Company and understanding it should be part of your investment process.

Of course Trex Company may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.