Insiders Rewarded With US$1.5m Addition To Investment As Zenas BioPharma Stock Hits US$864m

Zenas BioPharma, Inc. (NASDAQ:ZBIO) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 28% resulting in a US$190m addition to the company’s market value. Put another way, the original US$2.11m acquisition is now worth US$3.57m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Zenas BioPharma

Over the last year, we can see that the biggest insider purchase was by Independent Director Hongbo Lu for US$1m worth of shares, at about US$17.00 per share. We do like to see buying, but this purchase was made at well below the current price of US$20.51. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Zenas BioPharma insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around US$12.15. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. 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!

View our latest analysis for Zenas BioPharma

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Zenas BioPharma

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. Insiders own 0.9% of Zenas BioPharma shares, worth about US$7.5m, according to our data. However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Zenas BioPharma Tell Us?

The fact that there have been no Zenas BioPharma insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Zenas BioPharma stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 2 warning signs for Zenas BioPharma that deserve your attention before buying any shares.

Of course Zenas BioPharma 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.