Dutch Bros Insiders Sell US$32m Of Stock, Possibly Signalling Caution

In the last year, many Dutch Bros Inc. (NYSE:BROS) insiders sold a substantial stake in the company which may have sparked shareholders' attention. 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, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Dutch Bros

The Last 12 Months Of Insider Transactions At Dutch Bros

In fact, the recent sale by Co-Founder & Executive Chairman of the Board Travis Boersma was not their only sale of Dutch Bros shares this year. Earlier in the year, they fetched US$37.41 per share in a -US$8.1m sale. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$31.78). So it is hard to draw any strong conclusion from it.

Dutch Bros insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Dutch Bros Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Dutch Bros shares. Specifically, Co-Founder & Executive Chairman of the Board Travis Boersma ditched US$772k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of Dutch Bros

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. Dutch Bros insiders own 2.6% of the company, currently worth about US$144m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Dutch Bros Insider Transactions Indicate?

An insider sold Dutch Bros shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But since Dutch Bros is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. Case in point: We've spotted 2 warning signs for Dutch Bros you should be aware of.

But note: Dutch Bros may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.