We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Enzo Biochem, Inc. (NYSE:ENZ).
Do Insider Transactions Matter?
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 it is perfectly logical to keep tabs on what insiders are doing. For example, a Colombia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
The Last 12 Months Of Insider Transactions At Enzo Biochem
Outside Director Bruce Hanna made the biggest insider purchase in the last 12 months. That single transaction was for US$53k worth of shares at a price of US$3.52 each. That means that even when the share price was higher, an insider wanted to purchase shares. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. That purchase may suggest an expectation of positive returns over the long term.
Over the last year, we can see that insiders have bought 35.00k shares worth US$121k. In total, Enzo Biochem insiders bought more than they sold over the last year. They paid about US$3.46 on average. I’d consider this a positive as it suggests insiders see value at around the current price, which is US$2.71. You can see a visual depiction of insider transactions 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!
Enzo Biochem is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Enzo Biochem Have Bought Stock Recently
Over the last quarter, Enzo Biochem insiders have spent a meaningful amount on shares. Overall, 3 insiders shelled out US$121k for shares in the company — and none sold. This is a positive in our book as it implies some confidence.
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. Enzo Biochem insiders own 7.3% of the company, currently worth about US$9.3m based on the recent share price. 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 Enzo Biochem Insider Transactions Indicate?
It’s certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But we don’t feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Enzo Biochem insiders are expecting a bright future. Of course, the future is what matters most. So if you are interested in Enzo Biochem, you should check out this free report on analyst forecasts for the company.
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 email@example.com.