Chairman & CEO Christopher Kempczinski Sold A Bunch Of Shares In McDonald's

Some McDonald's Corporation (NYSE:MCD) shareholders may be a little concerned to see that the Chairman & CEO, Christopher Kempczinski, recently sold a substantial US$5.5m worth of stock at a price of US$300 per share. That sale reduced their total holding by 30% which is hardly insignificant, but far from the worst we've seen.

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The Last 12 Months Of Insider Transactions At McDonald's

Notably, that recent sale by Christopher Kempczinski is the biggest insider sale of McDonald's shares that we've seen in the last year. That means that an insider was selling shares at below the current price (US$304). 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 30% of Christopher Kempczinski's holding.

McDonald'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. 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 Of McDonald's

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. McDonald's insiders own 0.1% of the company, currently worth about US$283m 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.

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

Insiders haven't bought McDonald's stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since McDonald's is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. At Simply Wall St, we found 2 warning signs for McDonald's that deserve your attention before buying any shares.

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.

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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.