Executive Officer Of Zotefoams Sold 25% Of Their Shares

We wouldn't blame Zotefoams plc (LON:ZTF) shareholders if they were a little worried about the fact that David Stirling, the Executive Officer recently netted about UK£656k selling shares at an average price of UK£5.25. That's a big disposal, and it decreased their holding size by 25%, which is notable but not too bad.

View our latest analysis for Zotefoams

Zotefoams Insider Transactions Over The Last Year

Notably, that recent sale by David Stirling is the biggest insider sale of Zotefoams shares that we've seen in the last year. That means that even when the share price was below the current price of UK£5.50, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 25% of David Stirling's holding.

Happily, we note that in the last year insiders paid UK£37k for 8.95k shares. But they sold 129.74k shares for UK£675k. All up, insiders sold more shares in Zotefoams than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Zotefoams better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Zotefoams insiders own 5.7% of the company, worth about UK£15m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Zotefoams Insiders?

The stark truth for Zotefoams is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Zotefoams. Every company has risks, and we've spotted 2 warning signs for Zotefoams you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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.