Have Insiders Been Buying Zalaris ASA (OB:ZAL) Shares This Year?

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Zalaris ASA (OB:ZAL).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

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 Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

View our latest analysis for Zalaris

The Last 12 Months Of Insider Transactions At Zalaris

The Founder & CEO, Hans-Petter Mellerud, made the biggest insider sale in the last 12 months. That single transaction was for kr7.4m worth of shares at a price of kr37.00 each. That means that even when the share price was below the current price of kr52.00, 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 6.5% of Hans-Petter Mellerud's stake.

Over the last year, we can see that insiders have bought 243.26k shares worth kr9.5m. But insiders sold 250.74k shares worth kr9.1m. In the last twelve months there was more buying than selling by Zalaris insiders. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Zalaris is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Zalaris Insiders Bought Stock Recently

There has been significantly more insider buying, than selling, at Zalaris, over the last three months. Director Erik Langaker spent kr4.1m on stock. But we did see Executive Vice President of Central Europe Harold Goetsch sell shares worth kr30k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Does Zalaris Boast High Insider Ownership?

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 24% of Zalaris shares, worth about kr247m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Zalaris Tell Us?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Zalaris. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 3 warning signs for Zalaris (2 don't sit too well with us) you should be aware of.

But note: Zalaris may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, 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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