We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Z Energy Limited ( NZSE:ZEL ).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. 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.'
The Last 12 Months Of Insider Transactions At Z Energy
The insider, Mark Forsyth, made the biggest insider sale in the last 12 months. That single transaction was for NZ$158k worth of shares at a price of NZ$6.51 each. So we know that an insider sold shares at around the present share price of NZ$6.41. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Mark Forsyth was the only individual insider to sell shares in the last twelve months.
Over the last year, we can see that insiders have bought 18000 shares worth NZ$110k. On the other hand they divested 24208 shares, for NZ$158k. You can see a visual depiction of insider transactions (by 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of Z Energy
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Z Energy insiders own 0.2% of the company, worth about NZ$5.3m. We consider this fairly low insider ownership.
What Might The Insider Transactions At Z Energy Tell Us?
An insider hasn't bought Z Energy stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. As the saying goes, only fools rush in. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future .
But note: Z Energy 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.