Wendy's Independent Director Joseph Levato Sells 40% Of Holding

We'd be surprised if The Wendy's Company (NASDAQ:WEN) shareholders haven't noticed that the Independent Director, Joseph Levato, recently sold US$384k worth of stock at US$19.18 per share. The eyebrow raising move amounted to a reduction of 40% in their holding.

See our latest analysis for Wendy's

Wendy's Insider Transactions Over The Last Year

Notably, that recent sale by Joseph Levato is the biggest insider sale of Wendy's shares that we've seen in the last year. That means that even when the share price was slightly below the current price of US$19.33, an insider wanted to cash in some shares. 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. We note that the biggest single sale was only 40%of Joseph Levato's holding.

Wendy'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. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Wendy's better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does Wendy's Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Wendy's insiders own 8.7% of the company, worth about US$354m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Wendy's Insiders?

An insider hasn't bought Wendy'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. But since Wendy's is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 3 warning signs for Wendy's (1 is potentially serious!) and we strongly recommend you look at them before investing.

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 of direct interests only, but not derivative transactions or indirect interests.

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.