NerdWallet, Inc. (NASDAQ:NRDS) is up 12%, while insiders who purchased US$1.2m are up 3.9%
NerdWallet, Inc. (NASDAQ:NRDS) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 12%, resulting in a US$73m rise in the company's market capitalisation. In other words, the original US$1.2m purchase is now worth US$1.3m.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for NerdWallet
The Last 12 Months Of Insider Transactions At NerdWallet
In the last twelve months, the biggest single purchase by an insider was when Co-founder Tim Chen bought US$599k worth of shares at a price of US$9.80 per share. That means that an insider was happy to buy shares at around the current price of US$10.52. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider bought shares at close to current prices. The only individual insider to buy over the last year was Tim Chen.
Tim Chen bought 120.00k shares over the last 12 months at an average price of US$10.12. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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.
Insiders at NerdWallet Have Bought Stock Recently
There has been significantly more insider buying, than selling, at NerdWallet, over the last three months. Co-founder Tim Chen spent US$1.2m on stock. But we did see insider selling worth US$220k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. NerdWallet insiders own about US$340m worth of shares (which is 48% 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.
So What Does This Data Suggest About NerdWallet Insiders?
It's certainly positive to see the recent insider purchase. 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. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about NerdWallet. That's what I like to see! 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. For example - NerdWallet has 2 warning signs we think you should be aware of.
Of course NerdWallet 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
