Zentalis Pharmaceuticals Slides As Insider Purchases Lose Another US$37k

Insiders who bought US$252.8k worth of Zentalis Pharmaceuticals, Inc.'s (NASDAQ:ZNTL) stock at an average buy price of US$1.76 over the last year may be disappointed by the recent 12% decrease in the stock. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$215.6k, which is not great.

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.

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The Last 12 Months Of Insider Transactions At Zentalis Pharmaceuticals

The Independent Director Jan Skvarka made the biggest insider purchase in the last 12 months. That single transaction was for US$103k worth of shares at a price of US$1.72 each. That means that even when the share price was higher than US$1.50 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months insiders purchased 143.70k shares for US$253k. On the other hand they divested 34.62k shares, for US$65k. In total, Zentalis Pharmaceuticals insiders bought more than they sold over the last year. 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!

Check out our latest analysis for Zentalis Pharmaceuticals

Zentalis Pharmaceuticals is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Zentalis Pharmaceuticals

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Zentalis Pharmaceuticals insiders own 1.6% of the company, worth about US$1.7m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We consider this fairly low insider ownership.

So What Do The Zentalis Pharmaceuticals Insider Transactions Indicate?

The fact that there have been no Zentalis Pharmaceuticals insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Zentalis Pharmaceuticals 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 1 warning sign for Zentalis Pharmaceuticals that deserve your attention before buying any shares.

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.