53

JELD

As JELD-WEN($JELD) Shares Plunge 60%, Insiders Keep Buying Aggressively—Value Opportunity or Catching a Falling Knife?

04/07/2025 23:01

Sentiment

Serial Buy

Institutional Investor

Summary

  • Despite JELD-WEN Holding's ($JELD) stock declining approximately 60% over the past six months, insiders including Turtle Creek Asset Management have been consistently purchasing large blocks of shares
  • The insider buying pattern shows strategic timing with purchases concentrated after sharp price declines following earnings announcements, with directors and executives also participating
  • However, the company continues to face financial challenges including quarterly losses and a high debt-to-equity ratio of 189.3%, suggesting investors should consider both the positive insider buying signal and ongoing financial concerns

POSITIVE

  • Major shareholder Turtle Creek Asset Management has consistently purchased large blocks of shares over six months, strategically buying after price declines
  • Multiple company insiders including directors and executives (David G. Nord, Steven E. Wynne, Matthew Meier) have participated in 'cluster buying' with personal funds
  • Analysts' median price target of $9.50 suggests approximately 60% upside potential from current levels

NEGATIVE

  • The company continues to report losses in recent quarters, with Q4 2024 showing a $0.10 per share adjusted loss and a 12.3% revenue decline
  • A high debt-to-equity ratio of 189.3% adds significant financial burden to the company
  • Challenging industry conditions persist, including a weakened housing market, reduced remodeling activity, and high interest rates
  • Analyst sentiment remains cautious with 8 'hold', 1 'sell', and 1 'strong sell' recommendations

Expert

While JELD-WEN's persistent insider buying is typically a positive signal, the building materials sector continues to face pressure from high interest rates and housing market slowdown. The company's high debt ratio and consecutive quarterly losses complicate near-term recovery prospects, and such extreme insider buying sometimes represents a 'catching a falling knife' situation.

Previous Closing Price

$4.03

+0.05(1.26%)

Average Insider Trading Data Over the Past Year

$7.54

Purchase Average Price

$0

Sale Average Price

$21M

Purchase Amount

$0

Sale Amount

Transaction related to News

Trading Date

Filing Date

Insider

Title

Type

Avg. Price

Trans. Value

05/19/2025

05/19/2025

Sale

$

Insiders at JELD-WEN Holding Inc ($JELD) have been consistently purchasing shares despite the stock's significant decline over the past six months, drawing attention from investors seeking potential value opportunities. The stock of this windows and doors manufacturer has plummeted approximately 60% over the last six months, falling from around $15 in early November 2024 to under $6 currently. The decline has been particularly pronounced following two disappointing earnings reports. On November 4, 2024, $JELD reported third-quarter results that substantially missed analyst expectations, with revenue of $934.7 million falling short of the anticipated $990.8 million. The company posted an operating loss of $52.4 million and a net loss of $74.4 million. The stock plunged 28.6% the following day. Then on February 17, 2025, the company reported an adjusted loss of $0.10 per share for the fourth quarter, with revenue declining 12.3% year-over-year to $895.7 million. This prompted another steep decline of nearly 20% in the share price. However, amid this deteriorating performance and share price decline, major shareholder Turtle Creek Asset Management Inc has been aggressively buying shares. According to SEC filings, Turtle Creek purchased 1 million shares over just three days from November 5-7, 2024, representing an investment of approximately $10.37 million. Notably, Turtle Creek's purchasing pattern shows strategic timing, with significant buys occurring immediately after major price drops. Following the November earnings-related decline, when shares traded around $10, they accumulated heavily. They purchased another 395,000 shares for about $3.06 million between January 7-10, 2025, when the stock fell below $8. After the February earnings announcement pushed the price below $6, they acquired an additional 281,801 shares for approximately $1.59 million in late February and early March. Most recently, they purchased 331,469 shares for about $1.91 million between late March and early April. What makes this pattern even more compelling is that company insiders have joined the buying activity. Director David G. Nord purchased 20,000 shares for approximately $119,166 on February 24, 2025. Director Steven E. Wynne acquired 10,000 shares for about $60,100 on February 27. Additionally, EVP Matthew Meier bought 20,000 shares for approximately $114,600 on March 5. This pattern of insider buying is typically interpreted as a signal that insiders believe the company's stock is undervalued or that they have confidence in the long-term value of the company, despite current challenges. However, $JELD's financial situation remains concerning. According to recent financial data, the company has trailing twelve-month revenue of $3.78 billion but reported a net loss of $187.58 million, translating to a loss of $2.20 per share. The company's high debt-to-equity ratio of 189.3% adds to its financial burden. Industry experts point to several challenges facing $JELD, including a weakened housing market, reduced remodeling activity, and a high interest rate environment—all of which negatively impact the construction and remodeling industries. Analyst sentiment toward $JELD remains cautious, with current recommendations including 8 'holds', 1 'sell', and 1 'strong sell'. The median price target stands at $9.50, suggesting about 60% upside potential from current levels. The key question for investors is what signal these persistent insider purchases send. Traditionally, insider buying is considered a positive indicator, suggesting management has confidence in the company's future. Cluster buying—when multiple executives purchase shares—is interpreted as an even stronger signal. In $JELD's case, the consistent buying pattern across different levels of insiders—from major shareholders to directors and executives—following price declines suggests they believe the current stock price significantly undervalues the company's intrinsic worth. However, investors should consider insider buying as just one factor in their investment decision-making process. Improvement in financial performance, changes in industry conditions, and potential for future earnings recovery should also be weighed carefully. Particularly concerning is that $JELD's annual guidance has consistently fallen short of market expectations, indicating the company may continue to face challenges in the near term. In conclusion, while $JELD's insider trading pattern signals a positive long-term value perspective from those closest to the company, the industry challenges and financial pressures remain significant risk factors. Investors will need to balance these conflicting signals when making investment decisions.

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