Insiders of Uber Technologies, Inc. (NYSE:UBER) received good value on their investment after their US$10m purchase jumped US$4.4m in value
Uber Technologies, Inc. (NYSE:UBER) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 8.9%, resulting in a US$5.4b rise in the company's market capitalisation. Put another way, the original US$10m acquisition is now worth US$15m.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Uber Technologies
Uber Technologies Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CEO & Director Dara Khosrowshahi bought US$5.3m worth of shares at a price of US$26.73 per share. We do like to see buying, but this purchase was made at well below the current price of US$33.05. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months insiders purchased 450.00k shares for US$10m. But they sold 247.82k shares for US$7.7m. In the last twelve months there was more buying than selling by Uber Technologies insiders. The average buy price was around US$23.31. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Uber Technologies Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Uber Technologies shares. In total, Senior Vice President of Marketing & Public Affairs Jill Hazelbaker dumped US$3.5m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Insider Ownership Of Uber Technologies
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. Uber Technologies insiders own about US$113m worth of shares (which is 0.2% 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.
What Might The Insider Transactions At Uber Technologies Tell Us?
An insider sold Uber Technologies shares recently, but they didn't buy any. But we take heart from prior transactions. We are also comforted by the high levels of insider ownership. So we're not too bothered by recent selling. While we like knowing 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. Every company has risks, and we've spotted 2 warning signs for Uber Technologies you should know about.
Of course Uber Technologies 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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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.
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