Possible Bearish Signals With Dollarama Insiders Disposing Stock

In the last year, many Dollarama Inc. (TSE:DOL) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Dollarama Insider Transactions Over The Last Year

The Senior Vice President of Import Division, Geoffrey Robillard, made the biggest insider sale in the last 12 months. That single transaction was for CA$10m worth of shares at a price of CA$143 each. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$193. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 18% of Geoffrey Robillard's stake.

In total, Dollarama insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for Dollarama

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Insiders At Dollarama Have Sold Stock Recently

We've seen more insider selling than insider buying at Dollarama recently. In total, Chief Information Officer Nicolas Hien sold CA$794k worth of shares in that time. Meanwhile insider John Assaly bought CA$228k worth , as we said above . Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Insider Ownership Of Dollarama

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Dollarama insiders own about CA$782m worth of shares (which is 1.5% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Dollarama Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at Dollarama, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Dollarama makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Dollarama.

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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.