Trade Alert: The Independent Director Of Chipotle Mexican Grill, Inc. (NYSE:CMG), Gregg Engles, Has Just Spent US$381k Buying 64% More Shares

By
Simply Wall St
Published
May 23, 2022
NYSE:CMG
Source: Shutterstock

Potential Chipotle Mexican Grill, Inc. (NYSE:CMG) shareholders may wish to note that the Independent Director, Gregg Engles, recently bought US$381k worth of stock, paying US$1,271 for each share. That certainly has us anticipating the best, especially since they thusly increased their own holding by 64%, potentially signalling some real optimism.

See our latest analysis for Chipotle Mexican Grill

The Last 12 Months Of Insider Transactions At Chipotle Mexican Grill

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Albert Baldocchi, sold US$4.9m worth of shares at a price of US$1,785 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$1,294). So it may not tell us anything about how insiders feel about the current share price.

Over the last year we saw more insider selling of Chipotle Mexican Grill shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NYSE:CMG Insider Trading Volume May 23rd 2022

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Does Chipotle Mexican Grill Boast High 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 Chipotle Mexican Grill insiders own 0.7% of the company, worth about US$250m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Chipotle Mexican Grill Tell Us?

The stark truth for Chipotle Mexican Grill is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Chipotle Mexican Grill is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. While we like knowing 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. While conducting our analysis, we found that Chipotle Mexican Grill has 2 warning signs and it would be unwise to ignore them.

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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.

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