Zentalis Pharmaceuticals' Market Cap Up US$80m Following Year Of Insider Stock Buying

Zentalis Pharmaceuticals, Inc. (NASDAQ:ZNTL) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 11% resulting in a US$80m addition to the company’s market value. Put another way, the original US$219.4k acquisition is now worth US$254.3k.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Zentalis Pharmaceuticals

The Last 12 Months Of Insider Transactions At Zentalis Pharmaceuticals

Over the last year, we can see that the biggest insider purchase was by Independent Chairman of the Board David Johnson for US$168k worth of shares, at about US$9.88 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$11.56. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months Zentalis Pharmaceuticals insiders were buying shares, but not selling. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Zentalis Pharmaceuticals Insiders Bought Stock Recently

It's good to see that Zentalis Pharmaceuticals insiders have made notable investments in the company's shares. Overall, two insiders shelled out US$219k for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.

Insider Ownership Of Zentalis Pharmaceuticals

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 4.0% of Zentalis Pharmaceuticals shares, worth about US$32m. 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 Do The Zentalis Pharmaceuticals Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Zentalis Pharmaceuticals we think they are probably pretty confident of a bright future. 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. To help with this, we've discovered 4 warning signs (1 is a bit concerning!) that you ought to be aware of before buying any shares in Zentalis Pharmaceuticals.

But note: Zentalis 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 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.