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Despite recent gains, Larimar Therapeutics, Inc. (NASDAQ:LRMR) insiders are still down US$273k after purchasing last year

Some of the losses seen by insiders who purchased US$496k worth of Larimar Therapeutics, Inc. (NASDAQ:LRMR) shares over the past year were recovered after the stock increased by 16% over the past week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$273k since the time of purchase.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Larimar Therapeutics

Larimar Therapeutics Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Director Thomas Hamilton bought US$496k worth of shares at a price of US$8.75 per share. That means that an insider was happy to buy shares at above the current price of US$3.94. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Thomas Hamilton was the only individual insider to buy shares in the last twelve months.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
insider-trading-volume

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

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. 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 isn't picking up on much insider ownership at Larimar Therapeutics, though insiders do hold about US$634k worth of shares. We might be missing something but that seems like very low insider ownership.

What Might The Insider Transactions At Larimar Therapeutics Tell Us?

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. The transactions are fine but it'd be more encouraging if Larimar Therapeutics insiders bought more shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 6 warning signs for Larimar Therapeutics (2 don't sit too well with us!) that we believe deserve your full attention.

But note: Larimar Therapeutics 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.