Insiders' US$3.05m Investments In Red Following HCW Biologics' US$1.1m Dip In Market Value

Insiders who acquired US$3.05m worth of HCW Biologics Inc.'s (NASDAQ:HCWB) stock at an average price of US$22.83 in the past 12 months may be dismayed by the recent 20% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$266.8k.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At HCW Biologics

In the last twelve months, the biggest single purchase by an insider was when Founder Hing Wong bought US$2.4m worth of shares at a price of US$26.00 per share. That means that an insider was happy to buy shares at above the current price of US$2.00. 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.

In the last twelve months HCW Biologics insiders were buying shares, but not selling. They paid about US$22.83 on average. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

View our latest analysis for HCW Biologics

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does HCW Biologics Boast High Insider Ownership?

Many investors like to check how much of a company is owned by 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. Insiders own 32% of HCW Biologics shares, worth about US$1.4m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The HCW Biologics Insider Transactions Indicate?

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. Overall we don't see anything to make us think HCW Biologics insiders are doubting the company, and they do own shares. 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. To help with this, we've discovered 8 warning signs (7 can't be ignored!) that you ought to be aware of before buying any shares in HCW Biologics.

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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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.