Many Trex Company, Inc. (NYSE:TREX) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Trex Company Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Senior VP & Chief Human Resources Officer, Jacob Rudolph, for US$1.5m worth of shares, at about US$90.90 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$78.01). So it is hard to draw any strong conclusion from it. Notably Jacob Rudolph was also the biggest buyer, having purchased US$2.5k worth of shares.

Over the last year we saw more insider selling of Trex Company shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insiders At Trex Company Have Sold Stock Recently

We've seen more insider selling than insider buying at Trex Company recently. In total, Senior VP & Chief Human Resources Officer Jacob Rudolph sold US$1.5m worth of shares in that time. On the other hand we note Senior VP & Chief Human Resources Officer Jacob Rudolph bought US$2.5k worth of shares , as previously mentioned . Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.

Does Trex Company Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.5% of Trex Company shares, worth about US$39m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Trex Company Tell Us?

The insider sales have outweighed the insider buying, at Trex Company, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that Trex Company is growing earnings. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Trex Company has 1 warning sign we think you should be aware of.

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.

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.

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