Rhythm Biosciences Insider Purchases Yet To Pay Off Regardless Of Recent Strength

Insiders who bought AU$248.2k worth of Rhythm Biosciences Limited (ASX:RHY) stock in the last year have seen some of their losses recouped as the stock gained 36% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling AU$146k.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Rhythm Biosciences

The Last 12 Months Of Insider Transactions At Rhythm Biosciences

Over the last year, we can see that the biggest insider purchase was by Executive Chairman Otto Buttula for AU$248k worth of shares, at about AU$0.36 per share. That means that even when the share price was higher than AU$0.15 (the recent price), an insider wanted to purchase shares. 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. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Otto Buttula was the only individual insider to buy shares in the last twelve months.

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!

Rhythm Biosciences is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that Rhythm Biosciences insiders own 29% of the company, worth about AU$9.5m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Rhythm Biosciences Insiders?

The fact that there have been no Rhythm Biosciences insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Rhythm Biosciences and we see no evidence to suggest they are worried about 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. To that end, you should learn about the 5 warning signs we've spotted with Rhythm Biosciences (including 3 which don't sit too well with us).

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.