Dillard's Sees Insider Stock Selling

Insiders were net sellers of Dillard's, Inc.'s (NYSE:DDS ) stock during the past year. That is, insiders sold more stock than they bought.

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.

View our latest analysis for Dillard's

Dillard's Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Director, J.C. Watts, sold US$383k worth of shares at a price of US$383 per share. That means that an insider was selling shares at below the current price (US$389). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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 7.8% of J.C. Watts's stake. J.C. Watts was the only individual insider to sell over the last year.

J.C. Watts sold a total of 1.90k shares over the year at an average price of US$400. 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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Dillard's Insiders Bought Stock Recently

We saw some Dillard's insider buying shares in the last three months. Independent Director Robert Connor purchased US$35k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Insider Ownership Of Dillard's

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Dillard's insiders own 26% of the company, currently worth about US$1.6b 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 Dillard's Insider Transactions Indicate?

We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Dillard's insider transactions don't fill us with confidence. 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. While conducting our analysis, we found that Dillard's has 1 warning sign and it would be unwise to ignore this.

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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.