Insiders At Dollar General Sold US$1.6m In Stock, Alluding To Potential Weakness

Many Dollar General Corporation (NYSE:DG) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. 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 do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Dollar General

Dollar General Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Executive VP & Chief Information Officer, Carman Wenkoff, sold US$959k worth of shares at a price of US$162 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$81.13. So it is hard to draw any strong conclusion from it.

In total, Dollar General insiders sold more than they bought over the last year. The sellers received a price of around US$147, on average. We are not joyful about insider selling. But the selling was at much higher prices than the current share price (US$81.13), so it probably doesn't tell us a lot about the value on offer today. 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!

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Dollar General Insiders Are Selling The Stock

We've seen more insider selling than insider buying at Dollar General recently. In total, Executive Vice President of Store Operations & Development Steven Deckard sold US$174k worth of shares in that time. Meanwhile Independent Director Warren Bryant bought US$121k worth. We don't view these transactions as a positive sign.

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. Insiders own 0.3% of Dollar General shares, worth about US$49m. 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 Dollar General Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at Dollar General, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! 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. In terms of investment risks, we've identified 2 warning signs with Dollar General and understanding them should be part of your investment process.

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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.