JELD

As JELD-WEN ($JELD) Shares Plunge 60%, Insiders Keep Buying - Major Shareholder and Executives Make Contrarian Bet With Massive Purchases

04/02/2025 23:40

As JELD-WEN Holding ($JELD) shares have plummeted nearly 60% over the past 10 months, an intriguing countertrend has emerged: company insiders have been aggressively buying shares. What's particularly noteworthy is that not only are directors and executives purchasing stock, but major shareholder Turtle Creek Asset Management has consistently maintained a buying position despite the stock's weakness. JELD-WEN is one of North America's largest manufacturers of windows and doors, serving residential and commercial construction markets. Currently classified as a small-cap stock with a market capitalization of approximately $500 million, the company has seen its share price collapse from around $15 in June 2024 to under $6 in early April 2025, reflecting a severe loss of market confidence. Despite this downward trajectory, Turtle Creek Asset Management executed a massive buying spree in early November 2024, purchasing over 1 million shares (worth approximately $10.37 million) over three days. Specifically, they acquired 450,000 shares at an average price of $10.06 on November 5th, followed by 350,000 shares on November 6th and another 200,000 shares on November 7th. This purchasing activity occurred immediately after the stock had declined by more than 25%. This buying pattern continued in January 2025 when the stock fell further to around $8. Turtle Creek purchased an additional 395,000 shares (approximately $3.06 million) between January 7th and 10th, and another 75,000 shares on January 13th. After the stock dropped below $6 following mid-February earnings, several other insiders joined the buying trend. The underlying cause of the share price decline can be traced to the company's persistent underperformance. In the third-quarter results announced on November 4th, 2024, JELD-WEN reported a net loss of $74.4 million and revenue of $934.7 million, significantly below analyst expectations of $990.8 million. The stock plunged 28.6% the day after this announcement. The situation did not improve with the fourth-quarter results released on February 17th, 2025. The company reported an adjusted loss of 10 cents per share, with revenue declining 12.3% year-over-year to $895.7 million. This prompted another 20% drop in the share price. Notably, company directors began purchasing shares following these declines. On February 24th, Director David Nord acquired 20,000 shares (approximately $120,000) at an average price of $5.96, while Director Steven Wynne purchased 10,000 shares (about $60,000) at $6.01 on February 27th. Perhaps most significantly, EVP Matthew Meier bought 20,000 shares (approximately $115,000) at an average price of $5.73 on March 5th. Purchases by senior executives are often interpreted as a strong indicator of internal confidence in the company's future. Turtle Creek's buying continued through March and April, with approximately 281,000 shares purchased between February 27th and March 6th, another 70,000 shares on March 21st, and 125,000 shares between March 31st and April 1st. This demonstrates sustained buying conviction even as the stock price stagnated around the $6 level. Despite this insider buying activity, JELD-WEN's financial situation remains concerning. The company recently recorded an annual net loss of $187.6 million and has limited financial flexibility due to its high debt-to-equity ratio of 189.3%. Additionally, JELD-WEN has provided revenue guidance for 2025 of $3.2-$3.4 billion, suggesting a further 4-9% decline from 2024 levels. While consistent large-scale insider buying is generally interpreted as a positive signal, investors should consider several caveats. First, Turtle Creek Asset Management, as an investment firm, may have different investment strategies and time horizons compared to individual insiders, as it executes investments as part of various portfolios. Second, the current purchases are occurring after significant price declines, potentially representing a strategy to lower average purchase costs. Nevertheless, the fact that Turtle Creek is investing millions of dollars and that directors and senior executives are purchasing shares with their own funds clearly signals their belief that the company's intrinsic value exceeds its current market price. This is particularly meaningful considering that JELD-WEN still generates annual revenue of approximately $3.8 billion, while its market capitalization is only around $500 million. Going forward, investors should watch for signs of performance improvement, debt reduction, and changes in the macro environment for housing and construction. If the company successfully navigates the current headwinds and returns to profitability, these substantial insider purchases may prove to be very shrewd investments. Conversely, if revenue declines and losses persist, the company's high debt structure could pose additional risk factors.

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