Quite a few insiders have dramatically grown their holdings in Humacyte, Inc. (NASDAQ:HUMA) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

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.

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Humacyte Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Gordon Binder for US$668k worth of shares, at about US$6.78 per share. That means that an insider was happy to buy shares at above the current price of US$1.43. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months insiders purchased 229.13k shares for US$949k. But insiders sold 64.57k shares worth US$502k. In the last twelve months there was more buying than selling by Humacyte insiders. They paid about US$4.14 on average. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for Humacyte

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insiders At Humacyte Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Humacyte. Overall, six insiders shelled out US$146k for shares in the company -- and none sold. That shows some optimism about the company's future.

Insider Ownership Of Humacyte

For a common shareholder, it is worth checking how many shares are held by company 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. Humacyte insiders own about US$15m worth of shares. That equates to 6.4% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Humacyte Insider Transactions Indicate?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Humacyte insiders are well aligned, and that they may think the share price is too low. 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 found 4 warning signs for Humacyte that deserve your attention before buying any shares.

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.