We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 we'll take a look at whether insiders have been buying or selling shares in Zosano Pharma Corporation (NASDAQ:ZSAN).
Do Insider Transactions Matter?
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.
Insider transactions are not the most important thing when it comes to long-term investing. 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.
View our latest analysis for Zosano Pharma
The Last 12 Months Of Insider Transactions At Zosano Pharma
Over the last year, we can see that the biggest insider purchase was by Chairman John Walker for US$350k worth of shares, at about US$3.50 per share. That means that an insider was happy to buy shares at above the current price of US$0.78. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was John Walker.
You can see the insider transactions (by 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!
Zosano Pharma 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data isn't picking up on much insider ownership at Zosano Pharma, though insiders do hold about US$94k worth of shares. This level of insider ownership is notably low, and not very encouraging.
So What Do The Zosano Pharma Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Zosano Pharma shares in the last quarter. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Zosano Pharma insiders bought more shares in the company. 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. Every company has risks, and we've spotted 5 warning signs for Zosano Pharma (of which 1 shouldn't be ignored!) you should know about.
But note: Zosano Pharma 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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