Trade Alert: The Independent Chairman Of 2U, Inc. (NASDAQ:TWOU), Paul Maeder, Has Just Spent US$1.0m Buying 107% More Shares

By
Simply Wall St
Published
February 18, 2022
NasdaqGS:TWOU
Source: Shutterstock

2U, Inc. (NASDAQ:TWOU) shareholders (or potential shareholders) will be happy to see that the Independent Chairman, Paul Maeder, recently bought a whopping US$1.0m worth of stock, at a price of US$9.43. That increased their holding by a full 107%, which arguably implies the sort of confidence required for a shy sweet-natured nerd to ask the most popular kid in the school to go out on a date.

Check out our latest analysis for 2U

2U Insider Transactions Over The Last Year

Notably, that recent purchase by Paul Maeder is the biggest insider purchase of 2U 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$10.17. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the 2U insiders decided to buy shares at close to current prices.

While 2U insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NasdaqGS:TWOU Insider Trading Volume February 18th 2022

2U 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 of 2U

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that 2U insiders own 2.4% of the company, worth about US$19m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The 2U Insider Transactions Indicate?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest 2U insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 3 warning signs with 2U and understanding them should be part of your investment process.

Of course 2U 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, but not derivative transactions.

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