How Many Consolidated Zinc Limited (ASX:CZL) Shares Did Insiders Buy, In The Last Year?

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Consolidated Zinc Limited (ASX:CZL), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

See our latest analysis for Consolidated Zinc

Consolidated Zinc Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Stephen Copulos bought AU$160k worth of shares at a price of AU$0.003 per share. That means that an insider was happy to buy shares at above the current price of AU$0.003. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Happily, we note that in the last year insiders paid AU$325k for 92.07m shares. But they sold 8.97m shares for AU$25k. Overall, Consolidated Zinc insiders were net buyers during the last year. The average buy price was around AU$0.0035. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Consolidated Zinc is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Consolidated Zinc insiders own 18% of the company, worth about AU$1.7m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Consolidated Zinc Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Consolidated Zinc and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Consolidated Zinc. When we did our research, we found 5 warning signs for Consolidated Zinc (4 are potentially serious!) that we believe deserve your full attention.

Of course Consolidated Zinc may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

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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. 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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