Insiders At Dave & Buster’s Entertainment Sold US$5.2m In Stock, Alluding To Potential Weakness

In the last year, many Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) insiders sold a substantial stake in the company which may have sparked shareholders’ attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

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

Check out our latest analysis for Dave & Buster’s Entertainment

Dave & Buster’s Entertainment Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Chair of the Board, Kevin Sheehan, sold US$4.9m worth of shares at a price of US$65.72 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$40.33). So it may not tell us anything about how insiders feel about the current share price.

Over the last year we saw more insider selling of Dave & Buster’s Entertainment shares, than buying. 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!

I will like Dave & Buster’s Entertainment better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Dave & Buster’s Entertainment Have Bought Stock Recently

Over the last three months, we’ve seen significant insider buying at Dave & Buster’s Entertainment. We can see that Chief Financial Officer Darin Harper paid US$526k for shares in the company. No-one sold. That shows some optimism about the company’s future.

Does Dave & Buster’s Entertainment Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that Dave & Buster’s Entertainment insiders own 1.7% of the company, worth about US$26m. 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 & Buster’s Entertainment Insider Transactions Indicate?

The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. We don’t take much heart from transactions by Dave & Buster’s Entertainment insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. So they seem pretty well aligned, overall. 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’ve found that Dave & Buster’s Entertainment has 2 warning signs (1 doesn’t sit too well with us!) that deserve your attention before going any further with your analysis.

But note: Dave & Buster’s Entertainment 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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com