We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Zogenix, Inc. (NASDAQ:ZGNX).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
The Last 12 Months Of Insider Transactions At Zogenix
Over the last year, we can see that the biggest insider sale was by the insider, Roger Hawley, for US$3.2m worth of shares, at about US$53.10 per share. So we know that an insider sold shares at around the present share price of US$48.27. While we don’t usually like to see insider selling, it’s more concerning if the sales take place at a lower price. 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). Roger Hawley was the only individual insider to sell over the last year.
Roger Hawley ditched 80000 shares over the year. The average price per share was US$50.08. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Zogenix insiders own 0.4% of the company, worth about US$8.5m. We do generally prefer see higher levels of insider ownership.
What Might The Insider Transactions At Zogenix Tell Us?
It doesn’t really mean much that no insider has traded Zogenix shares in the last quarter. Our analysis of Zogenix insider transactions leaves us unenthusiastic. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. Of course, the future is what matters most. So if you are interested in Zogenix, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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