Zoetis Inc.'s (NYSE:ZTS)) market cap declines to US$88b but insiders who sold US$11m stock were able to hedge their losses

By
Simply Wall St
Published
February 24, 2022
NYSE:ZTS
Source: Shutterstock

By selling US$11m worth of Zoetis Inc. (NYSE:ZTS) stock at an average sell price of US$196 over the last year, insiders seemed to have made the most of their holdings. The company's market worth decreased by US$2.8b over the past week after the stock price dropped 3.1%, although insiders were able to minimize their losses

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Zoetis

The Last 12 Months Of Insider Transactions At Zoetis

In the last twelve months, the biggest single sale by an insider was when the insider, Catherine Knupp, sold US$2.2m worth of shares at a price of US$217 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$187. So it may not shed much light on insider confidence at current levels.

Zoetis insiders didn't buy any shares 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!

insider-trading-volume
NYSE:ZTS Insider Trading Volume February 24th 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders at Zoetis Have Sold Stock Recently

The last quarter saw substantial insider selling of Zoetis shares. In total, CEO & Director Kristin Peck dumped US$562k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Zoetis insiders own 0.1% of the company, worth about US$109m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Zoetis Tell Us?

An insider hasn't bought Zoetis stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But since Zoetis is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. You'd be interested to know, that we found 3 warning signs for Zoetis and we suggest you have a look.

But note: Zoetis 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, but not derivative transactions.

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