Insider Sellers Might Regret Selling Upstart Holdings Shares at a Lower Price Than Current Market Value

Upstart Holdings, Inc.'s (NASDAQ:UPST) stock price has dropped 14% in the previous week, but insiders who sold US$5.4m in stock over the past year have had less luck. Given that the average selling price of US$26.78 is still lower than the current share price, insiders would probably have been better off keeping their shares.

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.

See our latest analysis for Upstart Holdings

The Last 12 Months Of Insider Transactions At Upstart Holdings

In the last twelve months, the biggest single sale by an insider was when the Chief Financial Officer, Sanjay Datta, sold US$653k worth of shares at a price of US$33.18 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$22.54. So it may not shed much light on insider confidence at current levels.

Over the last year we saw more insider selling of Upstart Holdings shares, than buying. 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Upstart Holdings Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Upstart Holdings shares. Specifically, insiders ditched US$968k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Upstart Holdings insiders own about US$253m worth of shares (which is 13% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Upstart Holdings Insiders?

Insiders sold Upstart Holdings shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Upstart Holdings. In terms of investment risks, we've identified 3 warning signs with Upstart Holdings and understanding them should be part of your investment process.

Of course Upstart Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

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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.