We wouldn't blame Trex Company, Inc. (NYSE:TREX) shareholders if they were a little worried about the fact that Bryan Fairbanks, the President recently netted about US$591k selling shares at an average price of US$95.95. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 8.5%.
Trex Company Insider Transactions Over The Last Year
Notably, that recent sale by Bryan Fairbanks is the biggest insider sale of Trex Company shares that we've seen in the last year. So we know that an insider sold shares at around the present share price of US$93.91. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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 Of Trex Company
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. Trex Company insiders own about US$58m worth of shares. That equates to 0.6% 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.
What Might The Insider Transactions At Trex Company Tell Us?
An insider hasn't bought Trex Company stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since Trex Company is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. 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. Case in point: We've spotted 1 warning sign for Trex Company you should be aware of.
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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.