Recent gains in HCW Biologics Inc. (NASDAQ:HCWB) help add back some value on insider purchases worth US$6.8m, still down US$4.0m

Some of the losses seen by insiders who purchased US$6.8m worth of HCW Biologics Inc. (NASDAQ:HCWB) shares over the past year were recovered after the stock increased by 21% over the past week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$4.0m.

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.

See 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 Founder Hing Wong for US$5.0m worth of shares, at about US$8.00 per share. That means that even when the share price was higher than US$3.22 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months HCW Biologics insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart 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 growing companies that insiders are buying.

Insiders at HCW Biologics Have Bought Stock Recently

Over the last quarter, HCW Biologics insiders have spent a meaningful amount on shares. Overall, six insiders shelled out US$6.8m for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.

Insider Ownership of HCW Biologics

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. HCW Biologics insiders own 48% of the company, currently worth about US$55m 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.

So What Does This Data Suggest About HCW Biologics Insiders?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about HCW Biologics. Nice! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 4 warning signs we've spotted with HCW Biologics (including 1 which can't be ignored).

Of course HCW Biologics may not be the best stock to buy. So you may wish to see this free collection of high quality 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, but not derivative transactions.

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.

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