Dave & Buster's Entertainment Insiders Sell US$5.6m Of Stock, Possibly Signalling Caution

Over the past year, many Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) insiders sold a significant stake in the company which may have piqued investors' interest. 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, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

The Last 12 Months Of Insider Transactions At Dave & Buster's Entertainment

Over the last year, we can see that the biggest insider sale was by the Independent Chair of the Board & Interim CEO, Kevin Sheehan, for US$4.9m worth of shares, at about US$65.72 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$20.25). So it may not shed much light on insider confidence at current levels. Notably Kevin Sheehan was also the biggest buyer, having purchased US$3.3m worth of shares.

Over the last year, we can see that insiders have bought 114.25k shares worth US$3.3m. On the other hand they divested 98.51k shares, for US$5.6m. All up, insiders sold more shares in Dave & Buster's Entertainment than they bought, over the last year. The sellers received a price of around US$57.35, on average. Insider selling doesn't make us excited to buy. But the selling was at much higher prices than the current share price (US$20.25), 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Dave & Buster's Entertainment

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. 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 1.6% of the company, worth about US$13m. 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 Dave & Buster's Entertainment Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Dave & Buster's Entertainment shares in the last quarter. Still, the insider transactions at Dave & Buster's Entertainment in the last 12 months are not very heartening. But it's good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Dave & Buster's Entertainment. Our analysis shows 4 warning signs for Dave & Buster's Entertainment (1 is concerning!) and we strongly recommend you look at these before investing.

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.

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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.