Insiders' US$1.01m Investments In Red Following Zura Bio's US$21m Dip In Market Value

Insiders who acquired US$1.01m worth of Zura Bio Limited's (NASDAQ:ZURA) stock at an average price of US$4.14 in the past 12 months may be dismayed by the recent 20% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$287.9k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Zura Bio

The Independent Chairman Amit Munshi made the biggest insider purchase in the last 12 months. That single transaction was for US$500k worth of shares at a price of US$3.13 each. That means that even when the share price was higher than US$1.19 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months insiders purchased 242.94k shares for US$1.0m. On the other hand they divested 51.73k shares, for US$200k. In total, Zura Bio insiders bought more than they sold over the last year. They paid about US$4.14 on average. This is nice to see since it implies that insiders might see value around current prices. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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 Zura Bio

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

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 6.2% of Zura Bio shares, worth about US$5.5m, according to our data. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.

So What Do The Zura Bio Insider Transactions Indicate?

The fact that there have been no Zura Bio insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Zura Bio insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Zura Bio. At Simply Wall St, we've found that Zura Bio has 6 warning signs (3 can't be ignored!) that deserve your attention before going any further with your analysis.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.