We wouldn't blame McDonald's Corporation (NYSE:MCD) shareholders if they were a little worried about the fact that Christopher Kempczinski, the Chairman & CEO recently netted about US$1.2m selling shares at an average price of US$300. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 6.0%.
McDonald's Insider Transactions Over The Last Year
Notably, that recent sale by Christopher Kempczinski is the biggest insider sale of McDonald's shares that we've seen in the last year. So what is clear is that an insider saw fit to sell at around the current price of US$294. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
Insiders in McDonald's didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that McDonald's insiders own 0.2% of the company, worth about US$446m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About McDonald's Insiders?
Insiders haven't bought McDonald's stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. On the plus side, McDonald's makes money, and is growing profits. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about 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. Case in point: We've spotted 2 warning signs for McDonald's you should be aware of.
Of course McDonald's may not be the best stock to buy. So you may wish to see this free collection of high quality 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 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.