Last week, Celcuity Inc. (NASDAQ:CELC) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 33% last week, resulting in a US$51m increase in the company's market worth. In other words, the original US$1.6m purchase is now worth US$3.6m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Celcuity

Celcuity Insider Transactions Over The Last Year

The Co-Founder Brian Sullivan made the biggest insider purchase in the last 12 months. That single transaction was for US$1.5m worth of shares at a price of US$5.75 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$13.30. 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.

Happily, we note that in the last year insiders paid US$1.6m for 271.62k shares. But they sold 1.45k shares for US$11k. In total, Celcuity insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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).

Insiders At Celcuity Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Celcuity. Overall, two insiders shelled out US$1.5m for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.

Does Celcuity Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Celcuity insiders own about US$60m worth of shares. That equates to 29% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Celcuity Tell Us?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Celcuity shares, given these transactions (along with notable insider ownership of the company). 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. Every company has risks, and we've spotted 5 warning signs for Celcuity (of which 2 are concerning!) you should know about.

But note: Celcuity 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.

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