An Insider at Dollar General Corp Just Bought $717K Worth of Stock

Insiders have access to real-time information on their companies and often also have a wealth of experience that can help them evaluate their firms’ prospects. If they are buying company stock, it’s generally worth taking a closer look.

In this report, we are going to highlight some interesting insider buying at Dollar General Corp (DG:US). Dollar General is an American discount retailer. Currently, it has more than 19,000 stores across the US. It is listed on the New York Stock Exchange and has a market cap of $46.54 billion at present.

Insider Buying at Dollar General

Our data shows that on March 24, board member Timothy McGuire purchased 3,550 DG shares at an average price of $202 per share. This trade cost the insider approximately $717,087 and increased his holding to 11,104 shares.

Retail Experience

Mr. McGuire has considerable retail industry experience. Previously, he worked at McKinsey & Company, where he served as a leader of its global retail and consumer practice for almost 30 years and led the Americas retail practice for five years. Given his background, he is likely to have a good understanding of Dollar General’s prospects.

What stands out here is that he has made a large stock purchase that has increased the size of his holding substantially (+47%). The size of the trade suggests that he is very confident the stock is set to move higher.

Solid Q4 Results

Dollar General recently posted a solid set of Q4 2022 results.

For the quarter, the company reported same-store sales growth of 5.7%, driven by an increase in average transaction amount. Net income came in at $659.1 million for the quarter, an increase of 10.3% year on year, while diluted EPS increased 15.2% to $2.96.

Looking ahead, the company said that it expects sales growth of around 5.5% to 6.0% for the current financial year (same-store sales growth in the range of 3.0% to 3.5%) with EPS growth of between 4-6%. It expects to make share repurchases of around $500 million this year, which should support earnings per share. 

“Our fiscal 2023 full-year outlook reflects our confidence in the business, even in a potentially challenging economic and operating environment,” said John Garratt, Dollar General’s President and CFO. “While we anticipate the first half of fiscal 2023 to be negatively impacted by ongoing sales mix pressures, higher shrink levels, increased damages, and higher interest expense, we are confident in our full-year plans,” he added.

In light of these solid Q4 results, we see the insider buying here as a bullish signal.