Rapid7, Inc. (NASDAQ:RPD) insiders are still down US$176k after purchasing last year, recent gain helped regain some losses
Insiders who bought US$328k worth of Rapid7, Inc. (NASDAQ:RPD) stock in the last year recovered part of their losses as the stock rose by 10% last week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at US$176k since the time of purchase.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Rapid7
Rapid7 Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Chief Financial Officer Timothy Adams bought US$328k worth of shares at a price of US$65.50 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$30.33). 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. Timothy Adams was the only individual insider to buy during the last year.
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!
Rapid7 is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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. Insiders own 1.7% of Rapid7 shares, worth about US$31m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Rapid7 Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Rapid7 shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Rapid7 and their transactions don't cause us concern. 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. For instance, we've identified 4 warning signs for Rapid7 (1 is a bit unpleasant) you should be aware of.
But note: Rapid7 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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