Investors who take an interest in ThredUp Inc. (NASDAQ:TDUP) should definitely note that the Independent Director, Daniel Nova, recently paid US$1.64 per share to buy US$107k worth of the stock. That's a very solid buy in our book, and increased their holding by a noteworthy 20%.

ThredUp Insider Transactions Over The Last Year

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$1.52. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months insiders purchased 814.04k shares for US$782k. But they sold 32.82k shares for US$62k. In the last twelve months there was more buying than selling by ThredUp insiders. The average buy price was around US$0.96. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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.

Does ThredUp Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. ThredUp insiders own about US$16m worth of shares. That equates to 9.4% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The ThredUp Insider Transactions Indicate?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of ThredUp we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that ThredUp is showing 3 warning signs in our investment analysis, and 1 of those is potentially serious...

Of course ThredUp 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 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.