Over the last year, a good number of insiders have significantly increased their holdings in Tectonic Therapeutic, Inc. (NASDAQ:TECX). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.

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.

We've discovered 4 warning signs about Tectonic Therapeutic. View them for free.

The Last 12 Months Of Insider Transactions At Tectonic Therapeutic

Over the last year, we can see that the biggest insider purchase was by Co-Founder & Independent Director Timothy Springer for US$40m worth of shares, at about US$54.14 per share. That means that an insider was happy to buy shares at above the current price of US$21.75. 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Tectonic Therapeutic insiders may have bought shares in the last year, but they didn't sell any. Their average price was about US$35.06. This is nice to see since it implies that insiders might see value around current prices. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for Tectonic Therapeutic

Tectonic Therapeutic is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At Tectonic Therapeutic Have Bought Stock Recently

Over the last quarter, Tectonic Therapeutic insiders have spent a meaningful amount on shares. Co-Founder & Independent Director Timothy Springer spent US$11m on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Tectonic Therapeutic insiders own 41% of the company, worth about US$165m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Tectonic Therapeutic Insiders?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Tectonic Therapeutic. Looks promising! 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 Tectonic Therapeutic has 4 warning signs (2 are potentially serious!) that deserve your attention before going any further with your analysis.

But note: Tectonic Therapeutic 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 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.