Insiders who bought US$2.11m worth of Zenas BioPharma, Inc. (NASDAQ:ZBIO) stock in the last year have seen some of their losses recouped as the stock gained 12% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$407k since the time of purchase.

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.

Our free stock report includes 3 warning signs investors should be aware of before investing in Zenas BioPharma. Read for free now.

Zenas BioPharma Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Director Hongbo Lu bought US$1m worth of shares at a price of US$17.00 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$9.81). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months Zenas BioPharma insiders were buying shares, but not selling. The average buy price was around US$12.15. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by companies and 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!

View our latest analysis for Zenas BioPharma

Zenas BioPharma 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.

Insiders At Zenas BioPharma Have Bought Stock Recently

Over the last quarter, Zenas BioPharma insiders have spent a meaningful amount on shares. Overall, two insiders shelled out US$244k for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of Zenas BioPharma

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data suggests Zenas BioPharma insiders own 1.0% of the company, worth about US$3.9m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We consider this fairly low insider ownership.

What Might The Insider Transactions At Zenas BioPharma Tell Us?

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. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Zenas BioPharma stock. 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. While conducting our analysis, we found that Zenas BioPharma has 3 warning signs and it would be unwise to ignore them.

But note: Zenas BioPharma 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.