Who Has Been Buying Zscaler, Inc. (NASDAQ:ZS) Shares?
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 shareholders might well want to know whether insiders have been buying or selling shares in Zscaler, Inc. (NASDAQ:ZS).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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Zscaler Insider Transactions Over The Last Year
Manoj Apte made the biggest insider sale in the last 12 months. That single transaction was for US$2.6m worth of shares at a price of US$41.83 each. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$45.01. Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. As a general rule we consider it to be discouraging when insiders are selling below the current price. Please note, however, that this single sale was just 10.6% of Manoj Apte’s stake.
In the last twelve months insiders purchased 312.50k shares for US$5.0m. On the other hand they divested 68.38k shares, for US$2.7m. Overall, Zscaler insiders were net buyers last year. The average buy price was around US$16.00. We don’t deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today’s levels. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Zscaler better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Zscaler Have Sold Stock Recently
Over the last three months, we’ve seen significant insider selling at Zscaler. In total, insiders sold US$2.6m worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership of Zscaler
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that Zscaler insiders own 51% of the company, worth about US$2.6b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Zscaler Insider Transactions Indicate?
Insiders sold Zscaler shares recently, but they didn’t buy any. In contrast, they appear keener if you look at the last twelve months. On top of that, insiders own a significant portion of the company. So the recent selling doesn’t worry us. 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.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
