The fact that multiple Dollar General Corporation (NYSE:DG) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Dollar General Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive VP & Chief Information Officer, Carman Wenkoff, for US$959k worth of shares, at about US$162 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$86.01. So it is hard to draw any strong conclusion from it. Notably Carman Wenkoff was also the biggest buyer, having purchased US$444k worth of shares.

In the last twelve months insiders purchased 4.35k shares for US$444k. But they sold 8.92k shares for US$1.4m. Over the last year we saw more insider selling of Dollar General shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Dollar General Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Dollar General. Independent Director Warren Bryant spent US$121k on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Dollar General insiders own 0.3% of the company, worth about US$52m. 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 Dollar General Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. But we can't say the same for the transactions over the last 12 months. The more recent transactions are a positive, but Dollar General insiders haven't shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. Overall they seem reasonably aligned. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we found 2 warning signs for Dollar General that deserve your attention before buying any shares.

Of course Dollar General may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.