Insiders' CA$994.3k Investments In Red Following ZYUS Life Sciences' CA$6.7m Dip In Market Value

The recent price decline of 10% in ZYUS Life Sciences Corporation's (CVE:ZYUS) stock may have disappointed insiders who bought CA$994.3k worth of shares at an average price of CA$0.94 in the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth CA$841.8k, which is not great.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for ZYUS Life Sciences

ZYUS Life Sciences Insider Transactions Over The Last Year

The Independent Director Wayne Brownlee made the biggest insider purchase in the last 12 months. That single transaction was for CA$500k worth of shares at a price of CA$0.95 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.80). 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. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Over the last year, we can see that insiders have bought 1.05m shares worth CA$994k. But they sold 654.00k shares for CA$602k. In total, ZYUS Life Sciences insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

ZYUS Life Sciences Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at ZYUS Life Sciences. In total, insiders bought CA$800k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Insider Ownership Of ZYUS Life Sciences

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It's great to see that ZYUS Life Sciences insiders own 53% of the company, worth about CA$31m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The ZYUS Life Sciences Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest ZYUS Life Sciences insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. When we did our research, we found 4 warning signs for ZYUS Life Sciences (2 are a bit concerning!) that we believe deserve your full attention.

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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.