Stock Analysis

Have Insiders Been Selling The Trade Desk, Inc. (NASDAQ:TTD) Shares?

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NasdaqGM:TTD
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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in The Trade Desk, Inc. (NASDAQ:TTD).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

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Trade Desk Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Non-Employee Director, Thomas Falk, for US$3.0m worth of shares, at about US$307 per share. That means that an insider was selling shares at slightly below the current price (US$755). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was 91% of Thomas Falk's holding.

In the last year Trade Desk insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NasdaqGM:TTD Insider Trading Volume February 26th 2021

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

Insider Ownership of Trade Desk

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Trade Desk insiders own about US$3.7b worth of shares (which is 10% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Trade Desk Tell Us?

The fact that there have been no Trade Desk insider transactions recently certainly doesn't bother us. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Trade Desk insider transactions don't fill us with confidence. 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. At Simply Wall St, we found 2 warning signs for Trade Desk that deserve your attention before buying any shares.

But note: Trade Desk 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, but not derivative transactions.

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What are the risks and opportunities for Trade Desk?

Trade Desk, Inc. operates as a technology company in the United States and internationally.

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Rewards

  • Earnings are forecast to grow 41.88% per year

Risks

No risks detected for TTD from our risks checks.

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