Kezar Life Sciences, Inc. (NASDAQ:KZR) Insiders Increased Their Holdings

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Kezar Life Sciences, Inc. (NASDAQ:KZR).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

View our latest analysis for Kezar Life Sciences

Kezar Life Sciences Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Yunn Tsoi Gia for US$8.0m worth of shares, at about US$5.50 per share. That means that an insider was happy to buy shares at around the current price of US$5.62. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Kezar Life Sciences share holders is that insiders were buying at near the current price.

In the last twelve months Kezar Life Sciences insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Kezar Life Sciences Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Kezar Life Sciences insiders own about US$44m worth of shares. That equates to 17% of the company. 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 Kezar Life Sciences Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Kezar Life Sciences and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Kezar Life Sciences. Be aware that Kezar Life Sciences is showing 3 warning signs in our investment analysis, and 2 of those are significant...

But note: Kezar Life Sciences 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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