McDonald's: 3 Different Insiders Have Sold Shares This Year

|
 |  About: McDonald's Corporation (MCD), Includes: QSR, YUM
by: Markus Aarnio

In this article, I will feature one restaurant that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

McDonald’'s Corporation (NYSE:MCD) franchises and operates McDonald's restaurants in the United States, Europe, the Asia/Pacific, the Middle East, Africa, Canada, and Latin America.

Click to enlarge

Insider selling during the last 30 days

Here is a table of McDonald's insider-trading activity during the last 30 days.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Timothy Fenton COO Feb 18 24,492 No 37,359 shares 39.6%
David Hoffmann President, McDonald's APMEA Feb 12 618 No 13,739 shares + 28,978 options 1.4%
Donald Thompson CEO Jan 24 30,000 No 59,158 shares 33.6%
Click to enlarge

There have been 55,110 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of McDonald's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
February 2014 25,110 0
January 2014 30,000 0
December 2013 0 0
November 2013 15,971 0
October 2013 9,680 425
September 2013 20,000 0
August 2013 0 0
July 2013 1,771 0
June 2013 0 0
May 2013 0 0
April 2013 29,611 0
March 2013 41,364 0
February 2013 9,600 0
January 2013 22,672 0
Click to enlarge

There have been 205,779 shares sold, and there have been 425 shares purchased by insiders since January 2013.

Financials

McDonald's reported the full-year 2013 financial results on January 23 with the following highlights:

Revenue $28.1 billion
Net income $5.6 billion
Click to enlarge

MCD Revenue (Quarterly YoY Growth) Chart

McDonald's revenue growth has been slowing down since 2011.

Competition

McDonald's competitors include Burger King Worldwide (BKW), and Yum! Brands (NYSE:YUM). Here is a table comparing these companies.

Company MCD BKW YUM Industry Average (Restaurants)
Market Cap: 95.27B 9.17B 32.33B 23.41B
Employees: N/A N/A N/A 9.50K
Qtrly Rev Growth (yoy): 0.02 -0.34 0.01 0.23
Revenue: 28.11B 1.15B 13.08B 13.08B
Gross Margin: 0.39 0.70 0.26 0.26
EBITDA: 10.09B 642.60M 2.72B 1.52B
Operating Margin: 0.30 0.50 0.15 0.14
Net Income: 5.59B 233.70M 1.09B N/A
EPS: 5.55 0.65 2.36 2.22
P/E: 17.25 40.09 30.92 30.86
PEG (5 yr expected): 1.95 1.78 1.64 2.32
P/S: 3.38 7.97 2.47 1.79
Click to enlarge

McDonald's is trading above the industry average P/S ratio.

Here is a table of these competitors' insider activities during the last 30 days.

Company Insider buying / shares Insider selling / shares
BKW N/A N/A
YUM 0 96,639
Click to enlarge

Yum! Brands has also seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling McDonald's, and there have not been any insiders buying McDonald's during the last 30 days. Two of these three insiders decreased their holdings by more than 10%. McDonald's has an insider ownership of 0.08%.

McDonald's has a $85 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $85 price target. I would place a stop loss at $101, which is the all-time high. The two main reasons for the proposed short entry are bearish Point and Figure chart, and the intensive insider-selling activity.

Click to enlarge

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in MCD over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.