Insiders At Zscaler Sold US$38m In Stock, Alluding To Potential Weakness

Zscaler -2.17%

Zscaler

ZS

169.21

-2.17%

Many Zscaler, Inc. (NASDAQ:ZS) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Zscaler

Zscaler Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Ajay Mangal, for US$11m worth of shares, at about US$198 per share. That means that an insider was selling shares at slightly below the current price (US$224). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 0.2% of Ajay Mangal's holding.

Zscaler insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NasdaqGS:ZS Insider Trading Volume December 29th 2023

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At Zscaler Have Sold Stock Recently

The last three months saw significant insider selling at Zscaler. Specifically, insiders ditched US$27m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of Zscaler

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Zscaler insiders own 39% of the company, currently worth about US$13b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Zscaler Tell Us?

Insiders haven't bought Zscaler stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 3 warning signs for Zscaler you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 of direct interests only, but not derivative transactions or indirect interests.

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