Last week, Tectonic Therapeutic, Inc. (NASDAQ:TECX) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 11% last week, resulting in a US$55m increase in the company's market worth, implying a 39% gain on their initial purchase. Put another way, the original US$182.4k acquisition is now worth US$253.3k.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

The Last 12 Months Of Insider Transactions At Tectonic Therapeutic

In the last twelve months, the biggest single purchase by an insider was when Chief Financial Officer Daniel Lochner bought US$130k worth of shares at a price of US$21.61 per share. We do like to see buying, but this purchase was made at well below the current price of US$29.80. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Tectonic Therapeutic insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Tectonic Therapeutic is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership Of Tectonic Therapeutic

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Tectonic Therapeutic insiders own about US$185m worth of shares (which is 34% of the company). 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 Do The Tectonic Therapeutic Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Tectonic Therapeutic insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Tectonic Therapeutic has 4 warning signs (and 2 which make us uncomfortable) we think you should know about.

Of course Tectonic Therapeutic 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 of direct interests only, but not derivative transactions or indirect interests.

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.