We stopped counting the number of times insiders have amassed stocks of a company that is doing significantly. Unfortunately, there are also many examples of sharply falling stock prices after insiders sell stocks. So before you buy or sell DICK’S Sporting Goods, Inc. (NYSE: DKS) you might want to know if insiders have bought or sold.
What is insider selling?
It is perfectly legal for company insiders, including board members, to buy and sell shares in a company. However, these insiders are required to disclose their trading activities and are not allowed to trade inside information.
We would never suggest that investors base their decisions solely on what a company’s directors have done. But it makes perfect sense to keep an eye on insider activity. For example, a Columbia University study found that “insiders are more likely to buy their own company’s shares in the open market when the company is about to announce new agreements with customers and suppliers.”
See our latest analysis for DICK’S Sporting Goods
The last 12 months of insider trading at DICK’s Sporting Goods
The insider’s biggest single sale in the past twelve months was when Executive Chairman & Chief Merchandising Officer, Edward Stack, sold $ 8.3 million of shares at $ 62.78 per share. That means that even when the stock price was below the current price of $ 104, an insider wanted to redeem some stocks. We generally consider it negative for insiders to sell, especially if they did so below the current price, as that implies that they thought a lower price was reasonable. Insider selling is sometimes daunting, but it’s a weak signal. It’s worth noting that this sale represented only 11% of Edward Stack’s stake.
DICK’S Sporting Goods Insider didn’t buy any shares in the past year. The graph below shows insider transactions (by companies and individuals) over the past year. If you click on the chart, you will see all individual transactions including share price, individual and date!
NYSE: DKS Insider Trading Volume July 27, 2021
If you’re buying stocks that insiders are buying instead of selling, then maybe you will love this free List of companies. (Note: Insiders bought them).
DICK’s sporting goods insiders sell the share
In the past three months, we’ve seen significant inside sales at DICK’S Sporting Goods. In total, Senior VP John Hayes has sold $ 438,000 worth of shares during that time, and we have not seen any purchases. This could suggest that some insiders think the stocks aren’t cheap.
Another way to test the correspondence between a company’s executives and other shareholders is to see how many stocks they own. A high level of insider ownership often makes company management more attentive to the interests of shareholders. DICK’s Sporting Goods Insider owns 22% of the company which, based on its most recent share price, is currently about 2.0 billion. Most shareholders would be pleased with this type of insider ownership as it suggests that management’s incentives are good for others Shareholders are voted.
So what does this data say about DICK’s sporting goods insiders?
An insider recently sold DICK’S Sporting Goods shares but did not buy any. And even if we look at the past year, we haven’t seen any purchases. But it’s good to see DICK’S Sporting Goods increasing its revenue. While insiders own a lot of shares in the company (which is good), our analysis of their transactions doesn’t give us confidence in the company. While we like to know what happens to insiders’ property and transactions, we make sure we also consider the risks a stock is exposed to before making any investment decision. Case in point: we have discovered 3 warning signs for DICK’S Sporting Goods You should be aware of this, and 1 of them is significant.
If you prefer to look at another company – one with potentially superior financials – then don’t miss out on this free List of interesting companies that have HIGH return on equity and low debt.
For the purposes of this article, insiders are persons who report their transactions to the competent supervisory authority. We currently account for open market transactions and private dispositions, but no derivative transactions.
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This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which may be sensitive to the price. Simply Wall St has no position in the stocks mentioned.
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