Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Zentalis Pharmaceuticals, Inc. (NASDAQ:ZNTL), it sends a favourable message to the company's shareholders.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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Zentalis Pharmaceuticals Insider Transactions Over The Last Year

The Independent Director Jan Skvarka made the biggest insider purchase in the last 12 months. That single transaction was for US$103k worth of shares at a price of US$1.72 each. That means that an insider was happy to buy shares at above the current price of US$1.42. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Happily, we note that in the last year insiders paid US$223k for 122.70k shares. But they sold 37.98k shares for US$108k. In the last twelve months there was more buying than selling by Zentalis Pharmaceuticals insiders. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for Zentalis Pharmaceuticals

Zentalis Pharmaceuticals is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Zentalis Pharmaceuticals Insiders Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at Zentalis Pharmaceuticals. In total, four insiders bought US$223k worth of shares in that time. But insiders only sold shares worth US$52k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Does Zentalis Pharmaceuticals Boast High Insider Ownership?

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. From looking at our data, insiders own US$2.9m worth of Zentalis Pharmaceuticals stock, about 2.8% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. We consider this fairly low insider ownership.

So What Do The Zentalis Pharmaceuticals Insider Transactions Indicate?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. 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 Zentalis Pharmaceuticals insiders are expecting 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. Every company has risks, and we've spotted 2 warning signs for Zentalis Pharmaceuticals (of which 1 shouldn't be ignored!) you should know about.

But note: Zentalis Pharmaceuticals 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.