Don't Ignore The Insider Selling In Enzymatica

We note that the Enzymatica AB (publ) (STO:ENZY) Independent Director, Gudmundur Palmason, recently sold kr900k worth of stock for kr3.00 per share. On the bright side, that's just a small sale and only reduced their holding by 3.7%.

View our latest analysis for Enzymatica

The Last 12 Months Of Insider Transactions At Enzymatica

Notably, that recent sale by Independent Director Gudmundur Palmason was not the only time they sold Enzymatica shares this year. They previously made an even bigger sale of -kr1.5m worth of shares at a price of kr3.01 per share. That means that an insider was selling shares at below the current price (kr3.03). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 5.8%of Gudmundur Palmason's holding.

Happily, we note that in the last year insiders paid kr2.0m for 689.66k shares. But insiders sold 800.00k shares worth kr2.4m. Gudmundur Palmason ditched 800.00k shares over the year. The average price per share was kr3.00. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does Enzymatica Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Enzymatica insiders own about kr164m worth of shares. That equates to 33% of the company. 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 Enzymatica Tell Us?

An insider sold Enzymatica shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we found 3 warning signs for Enzymatica that deserve your attention before buying any shares.

Of course Enzymatica 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 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.