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Insiders who bought AbCellera Biologics Inc. (NASDAQ:ABCL) stock in the last 12 months were richly rewarded last week. The company's market value increased by US$290m as a result of the stock's 11% gain over the same period. In other words, the original US$20m purchase is now worth US$27m.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At AbCellera Biologics
Notably, that recent purchase by CEO, President & Chairperson Carl Hansen was not the only time they bought AbCellera Biologics shares this year. Earlier in the year, they paid US$6.41 per share in a US$9.0m purchase. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$10.29. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Over the last year, we can see that insiders have bought 2.66m shares worth US$20m. On the other hand they divested 300.00k shares, for US$5.1m. In the last twelve months there was more buying than selling by AbCellera Biologics insiders. The average buy price was around US$7.64. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!
AbCellera Biologics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at AbCellera Biologics Have Bought Stock Recently
Over the last quarter, AbCellera Biologics insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$14m worth of shares. This is a positive in our book as it implies some confidence.
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. AbCellera Biologics insiders own 27% of the company, currently worth about US$801m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At AbCellera Biologics Tell Us?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about AbCellera Biologics. That's what I like to see! 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. At Simply Wall St, we've found that AbCellera Biologics has 3 warning signs (1 is a bit unpleasant!) that deserve your attention before going any further with your analysis.
Of course AbCellera 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.
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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.