Should You Take Comfort From Insider Transactions At Zynerba Pharmaceuticals, Inc. (NASDAQ:ZYNE)?

We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 shareholders might well want to know whether insiders have been buying or selling shares in Zynerba Pharmaceuticals, Inc. (NASDAQ:ZYNE).

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a 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 equally, we would consider it foolish to ignore insider transactions altogether. 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 Zynerba Pharmaceuticals

The Last 12 Months Of Insider Transactions At Zynerba Pharmaceuticals

Over the last year, we can see that the biggest insider purchase was by Michael Rapoport for US$195k worth of shares, at about US$12.99 per share. That means that an insider was happy to buy shares at above the current price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We generally consider it a positive if insiders have been buying on market, even above the current price.

Happily, we note that in the last year insiders bought 82.00k shares for a total of US$723k. In total, Zynerba Pharmaceuticals insiders bought more than they sold over the last year. They paid about US$8.81 on average. These transactions suggest that insiders have considered the current price of US$4.66 attractive. You can see a visual depiction of insider transactions over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

NasdaqGM:ZYNE Insider Trading December 12th 18
NasdaqGM:ZYNE Insider Trading December 12th 18

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does Zynerba Pharmaceuticals Boast High Insider Ownership?

Many investors like to check how much of a company is owned by 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 12% of Zynerba Pharmaceuticals shares, worth about US$10.0m. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Zynerba Pharmaceuticals Insiders?

It doesn’t really mean much that no insider has traded Zynerba Pharmaceuticals shares in the last quarter. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we’d be more comfortable if they owned more Zynerba Pharmaceuticals stock. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Zynerba Pharmaceuticals.

If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.