In the last year, multiple insiders have substantially increased their holdings of AbCellera Biologics Inc. (NASDAQ:ABCL) stock, indicating that insiders' optimism about the company's prospects has increased.

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

Check out our latest analysis for AbCellera Biologics

AbCellera Biologics Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when CEO, President & Chairperson Carl Hansen bought US$998k worth of shares at a price of US$6.52 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$3.91). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. 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.

AbCellera Biologics insiders may have bought shares in the last year, but they didn't sell any. Their average price was about US$7.24. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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.

AbCellera Biologics Insiders 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$379k worth of shares. This is a positive in our book as it implies some confidence.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. AbCellera Biologics insiders own about US$306m worth of shares (which is 27% of the company). 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?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest AbCellera Biologics insiders are well aligned, and quite possibly think the share price is too low. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing AbCellera Biologics. In terms of investment risks, we've identified 1 warning sign with AbCellera Biologics and understanding this should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 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.