Jack Cowin Bought 106% More Shares In Domino's Pizza Enterprises

Those following along with Domino's Pizza Enterprises Limited (ASX:DMP) will no doubt be intrigued by the recent purchase of shares by Jack Cowin, Executive Chairman of the Board of the company, who spent a stonking AU$5.1m on stock at an average price of AU$15.11. That purchase boosted their holding by 106%, which makes us wonder if the move was inspired by quietly confident deeply-felt optimism.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

The Last 12 Months Of Insider Transactions At Domino's Pizza Enterprises

In fact, the recent purchase by Executive Chairman of the Board Jack Cowin was not their only acquisition of Domino's Pizza Enterprises shares this year. Earlier in the year, they paid AU$31.67 per share in a AU$9.5m purchase. That means that even when the share price was higher than AU$14.32 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Happily, we note that in the last year insiders paid AU$15m for 638.90k shares. But they sold 25.00k shares for AU$752k. Overall, Domino's Pizza Enterprises insiders were net buyers during the last year. They paid about AU$22.95 on average. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Domino's Pizza Enterprises

Domino's Pizza Enterprises 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 Domino's Pizza Enterprises Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 4.7% of Domino's Pizza Enterprises shares, worth about AU$64m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Domino's Pizza Enterprises Insider Transactions Indicate?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives 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 Domino's Pizza Enterprises we think they are probably pretty confident of a bright future. While it's good to be aware of 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 Domino's Pizza Enterprises (of which 1 is a bit concerning!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

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.