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:
- The stock was sold by three or more insiders within one month.
- The stock was not purchased by any insiders in the month of intensive selling.
- 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.
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%|
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|
There have been 205,779 shares sold, and there have been 425 shares purchased by insiders since January 2013.
McDonald's reported the full-year 2013 financial results on January 23 with the following highlights:
|Net income||$5.6 billion|
McDonald's revenue growth has been slowing down since 2011.
|Company||MCD||BKW||YUM||Industry Average (Restaurants)|
|Qtrly Rev Growth (yoy):||0.02||-0.34||0.01||0.23|
|PEG (5 yr expected):||1.95||1.78||1.64||2.32|
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|
Yum! Brands has also seen intensive insider selling during the last 30 days.
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.
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.