Viewing insider transactions for Revolution Medicines, Inc.'s (NASDAQ:RVMD ) over the last year, we see that insiders were net buyers. This means that a larger number of shares were purchased by insiders in relation to shares sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Revolution Medicines

Revolution Medicines Insider Transactions Over The Last Year

Notably, that recent purchase by Thilo Schroeder is the biggest insider purchase of Revolution Medicines shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of US$46.43. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Revolution Medicines share holders is that an insider was buying at near the current price. The only individual insider to buy over the last year was Thilo Schroeder.

The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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

Revolution Medicines Insiders Bought Stock Recently

At Revolution Medicines,over the last quarter, we have observed quite a lot more insider buying than insider selling. In total, Independent Director Thilo Schroeder bought US$35m worth of shares in that time. On the other hand, CEO, President & Chairman Mark Goldsmith netted US$550k by selling. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Does Revolution Medicines 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 Revolution Medicines insiders own 2.1% of the company, worth about US$171m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Revolution Medicines Insiders?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Revolution Medicines insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! 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. To help with this, we've discovered 3 warning signs (1 is concerning!) that you ought to be aware of before buying any shares in Revolution Medicines.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

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.