Don't Ignore The Insider Selling In Brinker International

We wouldn't blame Brinker International, Inc. (NYSE:EAT) shareholders if they were a little worried about the fact that Joseph Michael DePinto, the Independent Chairman of the Board recently netted about US$1.7m selling shares at an average price of US$170. However, that sale only accounted for 9.1% of their holding, so arguably it doesn't say much about their conviction.

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The Last 12 Months Of Insider Transactions At Brinker International

Over the last year, we can see that the biggest insider sale was by the Senior VP and COO for Chili's Grill & Bar, Douglas Comings, for US$2.1m worth of shares, at about US$160 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$168. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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 26% of Douglas Comings's holding.

Insiders in Brinker International didn't buy any shares in the last year. 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!

Check out our latest analysis for Brinker International

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Insider Ownership Of Brinker International

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. We usually like to see fairly high levels of insider ownership. Brinker International insiders own 1.7% of the company, currently worth about US$129m based on the recent share price. 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 Brinker International Tell Us?

Insiders haven't bought Brinker International 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 Brinker International 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. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Brinker International. You'd be interested to know, that we found 2 warning signs for Brinker International and we suggest you have a look.

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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 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.