We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Domino’s Pizza, Inc. (NYSE:DPZ).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Domino’s Pizza Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the , J. Doyle, for US$4.6m worth of shares, at about US$261 per share. So what is clear is that an insider saw fit to sell at around the current price of US$248. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn’t a major concern, though it’s hardly a good sign.
Over the last year, we note insiders sold 26435.65 shares worth US$7.1m. Insiders in Domino’s Pizza didn’t buy any shares in the last year. You can see the insider transactions (by 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Domino’s Pizza Insiders Are Selling The Stock
Over the last three months, we’ve seen significant insider selling at Domino’s Pizza. Specifically, Independent Director James Goldman ditched US$294k worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership of Domino’s Pizza
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. It appears that Domino’s Pizza insiders own 0.6% of the company, worth about US$65m. 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 Domino’s Pizza Insider Transactions Indicate?
An insider sold stock recently, but they haven’t been buying. And even if we look to the last year, we didn’t see any purchases. On the plus side, Domino’s Pizza makes money, and is growing profits. While insiders do own shares, they don’t own a heap, and they have been selling. We’d think twice before buying! If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: Domino’s Pizza 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.
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