Trade Alert: Independent Director Of Brinker International Cynthia Davis Has Sold Stock

Some Brinker International, Inc. (NYSE:EAT) shareholders may be a little concerned to see that the Independent Director, Cynthia Davis, recently sold a substantial US$1.1m worth of stock at a price of US$188 per share. That sale reduced their total holding by 34% which is hardly insignificant, but far from the worst we've seen.

See our latest analysis for Brinker International

Brinker International Insider Transactions Over The Last Year

In fact, the recent sale by Cynthia Davis was the biggest sale of Brinker International shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of US$188, an insider wanted to cash in some shares. 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. This single sale was just 34% of Cynthia Davis's stake.

Brinker International 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Brinker International insiders own 1.8% of the company, worth about US$153m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Brinker International Insiders?

Insiders haven't bought Brinker International 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. But it is good to see that Brinker International is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of 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 Brinker International 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 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.