Denny's Corporation's (NASDAQ:DENN) stock rose 16% last week, but insiders who sold US$3.0m worth of stock over the last year are probably in a more advantageous position. Selling at an average price of US$9.21, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

The Last 12 Months Of Insider Transactions At Denny's

Over the last year, we can see that the biggest insider sale was by the Director, John Miller, for US$1.3m worth of shares, at about US$9.36 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$7.51. So it may not shed much light on insider confidence at current levels.

Happily, we note that in the last year insiders paid US$143k for 22.00k shares. But insiders sold 329.00k shares worth US$3.0m. Over the last year we saw more insider selling of Denny's shares, than buying. 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!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insiders At Denny's Have Bought Stock Recently

At Denny's,over the last quarter, we have observed quite a lot more insider buying than insider selling. In fact, two insiders bought US$143k worth of shares. But Independent Chair of the Board Brenda Lauderback sold shares worth US$82k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership Of Denny's

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 Denny's insiders own 4.6% of the company, worth about US$17m. 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 Denny's Insider Transactions Indicate?

It is good to see recent purchasing. But we can't say the same for the transactions over the last 12 months. We don't take much heart from transactions by Denny's insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. So they seem pretty well aligned, overall. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Denny's. For instance, we've identified 4 warning signs for Denny's (1 makes us a bit uncomfortable) you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com