Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Dine Brands Global, Inc. (NYSE:DIN), that sends out a positive message to the company's shareholders.
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 Dine Brands Global
In the last twelve months, the biggest single purchase by an insider was when CEO & Director John Peyton bought US$100k worth of shares at a price of US$44.97 per share. That means that an insider was happy to buy shares at above the current price of US$38.30. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Happily, we note that in the last year insiders paid US$151k for 3.40k shares. On the other hand they divested 1.16k shares, for US$53k. In the last twelve months there was more buying than selling by Dine Brands Global insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Dine Brands Global Insiders Are Selling The Stock
The last three months saw significant insider selling at Dine Brands Global. Specifically, Independent Director Michael Hyter ditched US$53k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 2.4% of Dine Brands Global shares, worth about US$15m. 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 Dine Brands Global Tell Us?
An insider hasn't bought Dine Brands Global stock in the last three months, but there was some selling. But we take heart from prior transactions. We like that insiders own a fair amount of the company. So the recent selling doesn't worry us too much. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Dine Brands Global. To that end, you should learn about the 3 warning signs we've spotted with Dine Brands Global (including 2 which don't sit too well with us).
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.
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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.