Stock Analysis

Insiders of IN8bio, Inc. (NASDAQ:INAB) are up 12% on their US$1.8m purchase after IN8bio, Inc. (NASDAQ:INAB) rose 31% last week

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NasdaqGM:INAB
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IN8bio, Inc. (NASDAQ:INAB) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 31% resulting in a US$12m addition to the company’s market value. In other words, the original US$1.8m purchase is now worth US$2.0m.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for IN8bio

The Last 12 Months Of Insider Transactions At IN8bio

In the last twelve months, the biggest single purchase by an insider was when Independent Director Emily Fairbairn bought US$1.5m worth of shares at a price of US$1.90 per share. We do like to see buying, but this purchase was made at well below the current price of US$2.12. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

IN8bio insiders may have bought shares in the last year, but they didn't sell any. 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!

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NasdaqGM:INAB Insider Trading Volume December 4th 2022

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that IN8bio insiders own 30% of the company, worth about US$15m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At IN8bio Tell Us?

It doesn't really mean much that no insider has traded IN8bio 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 IN8bio insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 5 warning signs we've spotted with IN8bio (including 3 which can't be ignored).

But note: IN8bio 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, but not derivative transactions.

What are the risks and opportunities for IN8bio?

IN8bio, Inc., a clinical-stage biotechnology company, focuses on the discovery, development, and commercialization of gamma-delta T cell therapies for the treatment of cancers.

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Risks

  • Earnings have declined by 47% per year over past 5 years

  • Highly volatile share price over the past 3 months

  • Makes less than USD$1m in revenue ($0)

  • Does not have a meaningful market cap ($56M)

  • Shareholders have been diluted in the past year

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