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 Enzymatica AB (STO:ENZY).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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 Enzymatica
Director Gudmundur Palmason made the biggest insider purchase in the last 12 months. That single transaction was for kr13m worth of shares at a price of kr3.70 each. So it's clear an insider wanted to buy, at around the current price, which is kr4.57. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Enzymatica share holders is that insiders were buying at near the current price. We note that Gudmundur Palmason was both the biggest buyer and the biggest seller.
In the last twelve months insiders purchased 3.8m shares for kr14m. But insiders sold 3.6m shares worth kr13m. In the last twelve months there was more buying than selling by Enzymatica insiders. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Enzymatica is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Enzymatica
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. Insiders own 24% of Enzymatica shares, worth about kr157m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Enzymatica Insiders?
Insider sales and purchases have netted out over the last three months, so it's hard to draw any conclusion from recent trading. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Enzymatica insiders think the business has merit. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Enzymatica.
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.
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.