Aura Biosciences, Inc. (NASDAQ:AURA) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 22%, resulting in a US$81m rise in the company's market capitalisation, translating to a gain of 24% on their initial investment. As a result, their original purchase of US$1.60m worth of stock is now worth US$1.98m.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

The Last 12 Months Of Insider Transactions At Aura Biosciences

The Independent Chairman of the Board David Johnson made the biggest insider purchase in the last 12 months. That single transaction was for US$1.4m worth of shares at a price of US$7.30 each. Even though the purchase was made at a significantly lower price than the recent price (US$9.02), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

David Johnson bought 219.67k shares over the last 12 months at an average price of US$7.30. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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

Does Aura Biosciences 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data suggests Aura Biosciences insiders own 1.2% of the company, worth about US$4.7m. We prefer to see high levels of insider ownership.

So What Do The Aura Biosciences Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Aura Biosciences stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Aura Biosciences. Our analysis shows 4 warning signs for Aura Biosciences (2 are concerning!) and we strongly recommend you look at these before investing.

Of course Aura Biosciences 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.

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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.