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Recent gains in Dave Inc. (NASDAQ:DAVE) help add back some value on insider purchases worth US$15m, still down US$15m

Insiders who bought US$15m worth of Dave Inc. (NASDAQ:DAVE) stock in the last year have seen some of their losses recouped as the stock gained 17% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$15m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Dave

The Last 12 Months Of Insider Transactions At Dave

In the last twelve months, the biggest single purchase by an insider was when Co-Founder Jason Wilk bought US$15m worth of shares at a price of US$10.01 per share. That means that an insider was happy to buy shares at above the current price of US$0.34. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Jason Wilk.

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
insider-trading-volume

Dave is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders At Dave Have Bought Stock Recently

There has been significantly more insider buying, than selling, at Dave, over the last three months. We can see that Co-Founder Jason Wilk paid US$15m for shares in the company. But CFO & Secretary Kyle Beilman sold shares worth US$87k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. 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 27% of Dave shares, worth about US$35m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Dave Insider Transactions Indicate?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Dave insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Dave. At Simply Wall St, we've found that Dave has 4 warning signs (2 are concerning!) that deserve your attention before going any further with your analysis.

But note: Dave 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.

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.

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