Independent Chair of the Board of Dave & Buster's Entertainment Kevin Sheehan Buys 25% More Shares

Those following along with Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) will no doubt be intrigued by the recent purchase of shares by Kevin Sheehan, Independent Chair of the Board of the company, who spent a stonking US$961k on stock at an average price of US$25.48. Aside from being a solid chunk in its own right, the deft move also saw their holding increase by some 25%.

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

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

In fact, the recent purchase by Independent Chair of the Board Kevin Sheehan was not their only trade of Dave & Buster's Entertainment shares this year. Earlier in the year, they sold shares at a price ofUS$65.72 per share in a -US$4.9m transaction. 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$28.56). So it is hard to draw any strong conclusion from it.

Over the last year, we can see that insiders have bought 95.23k shares worth US$2.8m. On the other hand they divested 92.51k shares, for US$5.5m. In total, Dave & Buster's Entertainment insiders sold more than they bought over the last year. The average sell price was around US$59.17. Insider selling doesn't make us excited to buy. But we note that the selling, on average, was at well above the recently traded price of US$28.56. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Does Dave & Buster's Entertainment Boast High Insider Ownership?

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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Dave & Buster's Entertainment insiders own 1.9% of the company, worth about US$20m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Dave & Buster's Entertainment Tell Us?

It's certainly positive to see the recent insider purchases. On the other hand the transaction history, over the last year, isn't so positive. While recent transactions indicate confidence in Dave & Buster's Entertainment, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. Overall they seem reasonably aligned. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Dave & Buster's Entertainment. For example, Dave & Buster's Entertainment has 4 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

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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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