Don't Ignore The Insider Selling In Upstart Holdings

Some Upstart Holdings, Inc. (NASDAQ:UPST) shareholders may be a little concerned to see that the Chief Financial Officer, Sanjay Datta, recently sold a substantial US$1.3m worth of stock at a price of US$69.82 per share. That sale reduced their total holding by 13% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Upstart Holdings

Upstart Holdings Insider Transactions Over The Last Year

Notably, that recent sale by Sanjay Datta is the biggest insider sale of Upstart Holdings shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (US$74.06). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 13% of Sanjay Datta's stake.

Insiders in Upstart Holdings didn't buy any shares in 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Does Upstart Holdings Boast High 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. It's great to see that Upstart Holdings insiders own 13% of the company, worth about US$865m. 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. Looking to the last twelve months, our data doesn't show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of 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. Be aware that Upstart Holdings is showing 4 warning signs in our investment analysis, and 1 of those is significant...

But note: Upstart Holdings 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 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.