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The recent 16% drop in HCW Biologics Inc.'s (NASDAQ:HCWB) stock could come as a blow to insiders who purchased US$2.57m worth of stock at an average buy price of US$1.41 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$911.9k, which is not what they expected.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for HCW Biologics
The Last 12 Months Of Insider Transactions At HCW Biologics
Over the last year, we can see that the biggest insider purchase was by Chief Financial Officer Rebecca Byam for US$1.1m worth of shares, at about US$1.40 per share. That means that an insider was happy to buy shares at above the current price of US$0.50. 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.
While HCW Biologics insiders bought shares during the last year, they didn't sell. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insider Ownership Of HCW Biologics
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that HCW Biologics insiders own 48% of the company, worth about US$10m. 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 HCW Biologics Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like HCW Biologics insiders think the business has merit. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 6 warning signs for HCW Biologics (of which 1 shouldn't be ignored!) you should know about.