Rapid Micro Biosystems Insiders May Regret Not Buying More, Market Cap Hits US$139m

Last week, Rapid Micro Biosystems, Inc. (NASDAQ:RPID) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 13% last week, resulting in a US$17m increase in the company's market worth, implying a 289% gain on their initial purchase. As a result, the stock they originally bought for US$183.0k is now worth US$711.7k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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Rapid Micro Biosystems Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Director Richard Kollender bought US$50k worth of shares at a price of US$0.77 per share. Even though the purchase was made at a significantly lower price than the recent price (US$3.31), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Rapid Micro Biosystems insiders may have bought shares in the last year, but they didn't sell any. They paid about US$0.85 on average. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!

View our latest analysis for Rapid Micro Biosystems

Rapid Micro Biosystems 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.

Does Rapid Micro Biosystems Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, Rapid Micro Biosystems insiders have about 1.6% of the stock, worth approximately US$2.3m. We consider this fairly low insider ownership.

So What Do The Rapid Micro Biosystems Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Rapid Micro Biosystems stock. 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. For example - Rapid Micro Biosystems has 3 warning signs we think you should be aware of.

But note: Rapid Micro Biosystems 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.