On Mad Money's second "Executive Decision" segment of Thursday night, Jim Cramer spoke with Jesse Singh, president and CEO of The AZEK Co. (AZEK) , the buildings product manufacturer. Even with reporting a terrific quarter, the stock fell on Thursday.
Cramer pointed out to viewers the company's top- and bottom-line earnings beat, AZEK's 22% revenue growth and management's strong forecast for the coming year.
It was a "really strong quarter," Singh said. Revenue was up and margins improved.
"We have the benefit of playing in multiple technologies which gives us multiple opportunities to drive growth," Singh said. These technologies allow the company to perform well in decking and exterior building markets. The high-end products look very, very similar to wood, but are non-wood materials. In fact, AZEK's largest input is recycled material, which made up 54% of its materials in fiscal 2020.
There's a lot of long-term opportunity too, with so much of the market still being addressed with wood.
Let's be green and check out the charts and indicators of AZEK.
In this daily Japanese candlestick chart of AZEK, below, we can see that prices have formed a four-month triangle formation. This equilateral triangle shows prices trading sideways in a tighter and tighter high/low range. Trading volume has dried up as the opportunity to make money by trading short-term swings has declined.
The On-Balance-Volume (OBV) line is flat which tells us that buyers and sellers of AZEK are in balance. The Moving Average Convergence Divergence (MACD) oscillator is just below the zero line but edging upwards.
In this daily Point and Figure chart of AZEK, below, we can see the sideways triangle pattern. Despite Thursday's decline the chart is projecting a potential upside price target of $41. The X's and O's see accumulation and an upside breakout from the triangle.
Bottom line strategy: We do not have a lot of trading history to work with but what we do see so far is positive. Aggressive traders could go long AZEK risking a close below $32.