Great news for Rhythm Biosciences Limited (ASX:RHY): Insiders acquired stock in large numbers last year

·2 min read

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Rhythm Biosciences Limited's (ASX:RHY) case, it's fantastic news for shareholders.

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.

Check out our latest analysis for Rhythm Biosciences

The Last 12 Months Of Insider Transactions At Rhythm Biosciences

In the last twelve months, the biggest single purchase by an insider was when Executive Chairman Otto Buttula bought AU$582k worth of shares at a price of AU$0.85 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$1.15. 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.

In the last twelve months Rhythm Biosciences insiders were buying shares, but not selling. 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!

insider-trading-volume
insider-trading-volume

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Rhythm Biosciences Boast High Insider Ownership?

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. It's great to see that Rhythm Biosciences insiders own 43% of the company, worth about AU$105m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Rhythm Biosciences Tell Us?

It doesn't really mean much that no insider has traded Rhythm Biosciences shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Rhythm Biosciences insiders feel good about the company's future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 4 warning signs for Rhythm Biosciences you should be aware of, and 1 of them is significant.

But note: Rhythm Biosciences 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, but not derivative transactions.

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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.

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