Possible Bearish Signals With Jazz Pharmaceuticals Insiders Disposing Stock

The fact that multiple Jazz Pharmaceuticals plc (NASDAQ:JAZZ) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Jazz Pharmaceuticals

Jazz Pharmaceuticals Insider Transactions Over The Last Year

The Independent Director, Patrick Gerald Enright, made the biggest insider sale in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$153 each. So we know that an insider sold shares at around the present share price of US$139. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

In the last year Jazz Pharmaceuticals insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Jazz Pharmaceuticals Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Jazz Pharmaceuticals. In total, insiders dumped US$2.1m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Jazz Pharmaceuticals 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. We usually like to see fairly high levels of insider ownership. It's great to see that Jazz Pharmaceuticals insiders own 2.6% of the company, worth about US$228m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Jazz Pharmaceuticals Tell Us?

Insiders sold Jazz Pharmaceuticals shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Jazz Pharmaceuticals. You'd be interested to know, that we found 2 warning signs for Jazz Pharmaceuticals and we suggest you have a look.

But note: Jazz Pharmaceuticals 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. 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.