Have Domino's Pizza Insiders Been Selling Stock?

We wouldn't blame Domino's Pizza, Inc. (NASDAQ:DPZ) shareholders if they were a little worried about the fact that Andrew Balson, the Independent Director recently netted about US$3.0m selling shares at an average price of US$492. That's a big disposal, and it decreased their holding size by 14%, which is notable but not too bad.

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

In fact, the recent sale by Independent Director Andrew Balson was not their only sale of Domino's Pizza shares this year. They previously made an even bigger sale of -US$3.0m worth of shares at a price of US$429 per share. That means that an insider was selling shares at slightly below the current price (US$440). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 14% of Andrew Balson's stake.

In the last year Domino's Pizza insiders didn't buy any company stock. 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!

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Insider Ownership Of Domino's Pizza

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Domino's Pizza insiders own about US$63m worth of shares. That equates to 0.4% of the company. 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 Domino's Pizza Insider Transactions Indicate?

Insiders sold Domino's Pizza shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Domino's Pizza is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! 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. To that end, you should learn about the 3 warning signs we've spotted with Domino's Pizza (including 2 which are significant).

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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.