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Trade Alert: The Independent Director Of Kezar Life Sciences, Inc. (NASDAQ:KZR), Franklin Berger, Has Just Spent US$550k Buying 15% More Shares

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Kezar Life Sciences, Inc. (NASDAQ:KZR) shareholders (or potential shareholders) will be happy to see that the Independent Director, Franklin Berger, recently bought a whopping US$550k worth of stock, at a price of US$5.50. Not only is that a big swing, but it increased their holding size by 15%, which is definitely great to see.

See our latest analysis for Kezar Life Sciences

Kezar Life Sciences Insider Transactions Over The Last Year

Notably, that recent purchase by Franklin Berger is the biggest insider purchase of Kezar Life Sciences shares that we've seen in the last year. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$4.84). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Kezar Life Sciences insiders may have bought shares in the last year, but they didn't sell any. They paid about US$3.57 on average. 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. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NasdaqGS:KZR Recent Insider Trading June 12th 2020
NasdaqGS:KZR Recent Insider Trading June 12th 2020

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Kezar Life Sciences

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Kezar Life Sciences insiders own 14% of the company, worth about US$30m. 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 Kezar Life Sciences Insiders?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Kezar Life Sciences we think they are probably pretty confident of a bright future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To that end, you should learn about the 4 warning signs we've spotted with Kezar Life Sciences (including 2 which shouldn't be ignored).

Of course Kezar Life Sciences may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.