Dave & Buster’s Entertainment Insiders Added US$2.51m Of Stock To Their Holdings

Quite a few insiders have dramatically grown their holdings in Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) over the past 12 months. An insider’s optimism about the company’s prospects is a positive sign.

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.

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The Independent Chair of the Board Kevin Sheehan made the biggest insider purchase in the last 12 months. That single transaction was for US$961k worth of shares at a price of US$25.48 each. That means that an insider was happy to buy shares at above the current price of US$18.03. 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. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Over the last year, we can see that insiders have bought 93.82k shares worth US$2.5m. On the other hand they divested 11.93k shares, for US$370k. Overall, Dave & Buster’s Entertainment insiders were net buyers during the last year. 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!

Check out our latest analysis for Dave & Buster’s Entertainment

Dave & Buster’s Entertainment is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Over the last quarter, Dave & Buster’s Entertainment insiders have spent a meaningful amount on shares. CEO & Director Tarun Lal spent US$252k on stock, and there wasn’t any selling. This makes one think the business has some good points.

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Dave & Buster’s Entertainment insiders own about US$15m worth of shares. That equates to 2.2% 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.

It’s certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Insiders likely see value in Dave & Buster’s Entertainment shares, given these transactions (along with notable insider ownership of the company). 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’ve found that Dave & Buster’s Entertainment has 3 warning signs (1 is a bit unpleasant!) that deserve your attention before going any further with your analysis.

But note: Dave & Buster’s Entertainment may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.