Don't Ignore The Insider Selling In Chipotle Mexican Grill

Some Chipotle Mexican Grill, Inc. (NYSE:CMG) shareholders may be a little concerned to see that the Chairman & CEO, Brian Niccol, recently sold a substantial US$20m worth of stock at a price of US$3,186 per share. That sale reduced their total holding by 22% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Chipotle Mexican Grill

The Last 12 Months Of Insider Transactions At Chipotle Mexican Grill

Notably, that recent sale by Brian Niccol is the biggest insider sale of Chipotle Mexican Grill shares that we've seen in the last year. So we know that an insider sold shares at around the present share price of US$3,155. While insider selling is a negative, to us, it is more negative if the shares are sold 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.

In total, Chipotle Mexican Grill insiders sold more than they bought 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 Chipotle Mexican Grill better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership Of Chipotle Mexican Grill

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Chipotle Mexican Grill insiders own about US$569m worth of shares (which is 0.7% 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.

So What Does This Data Suggest About Chipotle Mexican Grill Insiders?

Insiders sold Chipotle Mexican Grill shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Chipotle Mexican Grill is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 1 warning sign for Chipotle Mexican Grill you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.