Even though RYTHM, Inc. (NASDAQ:RYM) stock gained 13% last week, insiders who sold US$416k worth of stock over the past year are probably better off. Selling at an average price of US$31.98, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

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 RYTHM

Over the last year, we can see that the biggest insider sale was by the Independent Director, Maxwell Holtzman, for US$214k worth of shares, at about US$45.00 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$27.06. So it may not tell us anything about how insiders feel about the current share price.

In total, RYTHM insiders sold more than they bought over the last year. The sellers received a price of around US$31.98, on average. It is certainly not great to see that insiders have sold shares in the company. But the selling was at much higher prices than the current share price (US$27.06), so it probably doesn't tell us a lot about the value on offer today. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of RYTHM

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 RYTHM insiders own 2.2% of the company, worth about US$1.2m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We consider this fairly low insider ownership.

So What Does This Data Suggest About RYTHM Insiders?

It doesn't really mean much that no insider has traded RYTHM shares in the last quarter. The insider transactions at RYTHM are not inspiring us to buy. And usually insiders own more stock in the company, according to our data. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

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.