Insiders' US$2.57m Investments In Red Following HCW Biologics' US$3.7m Dip In Market Value

Insiders who bought US$2.57m worth of HCW Biologics Inc.'s (NASDAQ:HCWB) stock at an average buy price of US$1.41 over the last year may be disappointed by the recent 16% decrease in the stock. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$911.9k, which is not great.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for HCW Biologics

HCW Biologics Insider Transactions Over The Last Year

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. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$0.50). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months HCW Biologics insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. 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

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. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At HCW Biologics Tell Us?

It doesn't really mean much that no insider has traded HCW Biologics shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like HCW Biologics insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing HCW Biologics. Every company has risks, and we've spotted 6 warning signs for HCW Biologics (of which 1 is a bit concerning!) you should know about.

But note: HCW Biologics 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.