Many Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Dave & Buster's Entertainment Insider Transactions Over The Last Year

The Independent Chair of the Board, Kevin Sheehan, made the biggest insider sale in the last 12 months. That single transaction was for US$4.9m worth of shares at a price of US$65.72 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$36.80. So it may not tell us anything about how insiders feel about the current share price.

Over the last year, we can see that insiders have bought 28.49k shares worth US$1.0m. On the other hand they divested 92.51k shares, for US$5.5m. Over the last year we saw more insider selling of Dave & Buster's Entertainment shares, than buying. 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!

I will like Dave & Buster's Entertainment better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Dave & Buster's Entertainment Have Sold Stock Recently

The last three months saw some Dave & Buster's Entertainment insider selling. US$545k worth of shares were sold by insider Steven Klohn. But US$502k was spent on buying, too, . While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.

Insider Ownership Of Dave & Buster's Entertainment

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Dave & Buster's Entertainment insiders own about US$23m worth of shares. That equates to 1.7% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Dave & Buster's Entertainment Insider Transactions Indicate?

Our data shows a little more insider selling than buying in the last three months. But the difference is small, and thus, not concerning. Recent insider selling makes us a little nervous, in light of the broader picture of Dave & Buster's Entertainment insider transactions. The modest level of insider ownership is, at least, some comfort. 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. To that end, you should learn about the 2 warning signs we've spotted with Dave & Buster's Entertainment (including 1 which shouldn't be ignored).

Of course Dave & Buster's Entertainment 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.