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Are Insiders Selling Trex Company, Inc. (NYSE:TREX) Stock?

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Trex Company, Inc. (NYSE:TREX), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.

We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’

Check out our latest analysis for Trex Company

Trex Company Insider Transactions Over The Last Year

Vice President of Operations Jay Scripter made the biggest insider sale in the last 12 months. That single transaction was for US$925k worth of shares at a price of US$79.48 each. So we know that an insider sold shares at around the present share price of US$76.54. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price. Notably Jay Scripter was also the biggest buyer, having purchased US$18k worth of shares.

Over the last year we saw more insider selling of Trex Company shares, than buying. They sold for an average price of about US$69.77. It’s not particularly great to see insiders were selling shares at below recent prices. But we wouldn’t put too much weight on the insider selling. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NYSE:TREX Recent Insider Trading, February 27th 2019
NYSE:TREX Recent Insider Trading, February 27th 2019

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Are Trex Company Insiders Buying Or Selling?

We’ve only seen a tiny insider purchase valued at US$4.1k, in the last three months. So it is hard to draw any conclusion about how insiders are feeling about the stock, from these recent trades.

Does Trex Company Boast High Insider Ownership?

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. Insiders own 0.6% of Trex Company shares, worth about US$26m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Trex Company Insider Transactions Indicate?

We note a that there has been a tad more insider buying than selling, recently. But the difference isn’t much. We don’t take much encouragement from the transactions by Trex Company insiders. The modest level of insider ownership is, at least, some comfort. Of course, the future is what matters most. So if you are interested in Trex Company, you should check out this free report on analyst forecasts for the company.

If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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