Dine Brands Global Insiders May Regret Not Buying More, Market Cap Hits US$395m

Dine Brands Global, Inc. (NYSE:DIN) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 12%, resulting in a US$45m rise in the company's market capitalisation, translating to a gain of 19% on their initial investment. Put another way, the original US$438.0k acquisition is now worth US$522.5k.

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 Last 12 Months Of Insider Transactions At Dine Brands Global

Over the last year, we can see that the biggest insider purchase was by insider Howard Berk for US$100k worth of shares, at about US$24.50 per share. We do like to see buying, but this purchase was made at well below the current price of US$33.00. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Over the last year, we can see that insiders have bought 15.83k shares worth US$438k. On the other hand they divested 1.80k shares, for US$52k. In total, Dine Brands Global insiders bought more than they sold over the last year. They paid about US$27.67 on average. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Dine Brands Global

Dine Brands Global 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.

Does Dine Brands Global Boast High 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. Dine Brands Global insiders own about US$20m worth of shares. That equates to 5.2% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Dine Brands Global Insiders?

The fact that there have been no Dine Brands Global insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Insiders own shares in Dine Brands Global and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 4 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.