Yahoo Finance Insiders At McDonald's Sold US$4.5m In Stock, Alluding To Potential Weakness \
In the last year, many McDonald's Corporation (NYSE:MCD) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for McDonald's
McDonald's Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Executive VP & CFO, Ian Borden, sold US$2.0m worth of shares at a price of US$256 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$296. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was 53% of Ian Borden's stake.
In the last year McDonald's insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
McDonald's Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at McDonald's. In total, insiders dumped US$1.3m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership Of McDonald's
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that McDonald's insiders own 0.04% of the company, worth about US$93m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
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. Looking to the last twelve months, our data doesn't show any insider buying. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing McDonald's. At Simply Wall St, we found 2 warning signs for McDonald's that deserve your attention before buying any shares.
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, but not derivative transactions.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
