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Those following along with Del Taco Restaurants, Inc. (NASDAQ:TACO) will no doubt be intrigued by the recent purchase of shares by Ari Levy, Independent Director of the company, who spent a stonking US$505k on stock at an average price of US$7.49. Not only is that a big swing, but it increased their holding size by 19%, which is definitely great to see.
The Last 12 Months Of Insider Transactions At Del Taco Restaurants
Notably, that recent purchase by Independent Director Ari Levy was not the only time they bought Del Taco Restaurants shares this year. Earlier in the year, they paid US$2.67 per share in a US$606k purchase. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$8.13. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
In the last twelve months Del Taco Restaurants insiders were buying shares, but not selling. They paid about US$4.39 on average. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. 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!
Del Taco Restaurants is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 7.6% of Del Taco Restaurants shares, worth about US$23m. 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 Del Taco Restaurants Insider Transactions Indicate?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Del Taco Restaurants we think they are probably pretty confident of a bright 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. At Simply Wall St, we found 1 warning sign for Del Taco Restaurants that deserve your attention before buying any shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.
This article by Simply Wall St is general in nature. 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.
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