Bullish ThredUp Insiders Rewarded As Their Investment Rises To US$1.39m

Last week, ThredUp Inc. (NASDAQ:TDUP) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 12% last week, resulting in a US$19m increase in the company's market worth, implying a 55% gain on their initial purchase. As a result, their original purchase of US$894.0k worth of stock is now worth US$1.39m.

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 ThredUp

The Last 12 Months Of Insider Transactions At ThredUp

In the last twelve months, the biggest single purchase by an insider was when Director Noam Paransky bought US$146k worth of shares at a price of US$0.81 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$1.56. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Happily, we note that in the last year insiders paid US$894k for 888.94k shares. But insiders sold 32.82k shares worth US$62k. Overall, ThredUp insiders were net buyers during the last year. The average buy price was around US$1.01. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

ThredUp is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

ThredUp Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at ThredUp. Overall, two insiders shelled out US$458k for shares in the company -- and none sold. This makes one think the business has some good points.

Insider Ownership Of ThredUp

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 9.8% of ThredUp shares, worth about US$16m. 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 ThredUp Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in ThredUp shares, given these transactions (along with notable insider ownership of the company). 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. Our analysis shows 3 warning signs for ThredUp (1 shouldn't be ignored!) and we strongly recommend you look at them before investing.

But note: ThredUp 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.