Cartesian Therapeutics' Market Cap Drops To US$430m Leaving Insiders With Losses

Insiders who acquired US$13.2m worth of Cartesian Therapeutics, Inc.'s (NASDAQ:RNAC) stock at an average price of US$18.17 in the past 12 months may be dismayed by the recent 14% price decline. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$11.5m, which is not what they expected.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Cartesian Therapeutics

The Last 12 Months Of Insider Transactions At Cartesian Therapeutics

In the last twelve months, the biggest single purchase by an insider was when Director Timothy Springer bought US$7.4m worth of shares at a price of US$18.42 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$15.80). 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.

Over the last year, we can see that insiders have bought 726.99k shares worth US$13m. But insiders sold 36.36k shares worth US$610k. In the last twelve months there was more buying than selling by Cartesian Therapeutics insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

Insiders At Cartesian Therapeutics Have Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at Cartesian Therapeutics. Director Timothy Springer spent US$1.3m on stock. But insiders only sold shares worth US$610k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Cartesian Therapeutics insiders own 58% of the company, currently worth about US$248m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Cartesian Therapeutics Insider Transactions Indicate?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Cartesian Therapeutics. One for the watchlist, at least! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 4 warning signs for Cartesian Therapeutics (3 are potentially serious!) and we strongly recommend you look at them before investing.

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.