Some McDonald's Corporation (NYSE:MCD) shareholders may be a little concerned to see that the Executive VP, Desiree Ralls-Morrison, recently sold a substantial US$2.0m worth of stock at a price of US$290 per share. That diminished their holding by a very significant 52%, which arguably implies a strong desire to reallocate capital.
McDonald's Insider Transactions Over The Last Year
The Chairman & CEO, Christopher Kempczinski, made the biggest insider sale in the last 12 months. That single transaction was for US$5.5m worth of shares at a price of US$300 each. So what is clear is that an insider saw fit to sell at around the current price of US$290. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
McDonald's insiders didn't buy any shares over the last year. 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!
I will like McDonald's better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insider Ownership Of McDonald's
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. McDonald's insiders own about US$142m worth of shares (which is 0.07% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At McDonald's Tell Us?
Insiders haven't bought McDonald's stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since McDonald's is profitable and growing, we're not too worried by this. 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. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. You'd be interested to know, that we found 2 warning signs for McDonald's and we suggest you have a look.
But note: McDonald's may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.
