McDonald's: 6 Different Insiders Have Sold Shares This Month

Apr.27.14 | About: McDonald's Corporation (MCD)

Summary

6 insiders sold McDonald's stock within one month.

The stock was not purchased by any insiders in the month of intensive selling.

4 of these 6 insiders 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.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Kenneth Koziol EVP April 23 905 No 13,884 shares 6.1%
Gloria Santona EVP April 25 19,154 No 60,719 shares 24.0%
Donald Thompson CEO April 23 30,000 No 77,720 shares 27.8%
Richard Floersch EVP April 24 19,987 No 42,301 shares 32.1%
John Rogers Director April 23 5,000 No 87,500 shares 5.4%
Robert Eckert Director April 24 5,000 No 10,000 shares 33.3%
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There have been 80,046 shares sold by insiders during the last 30 days.

Insider selling by calendar month

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

Month Insider selling / shares Insider buying / shares
April 2014 80,046 0
March 2014 0 0
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
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There have been 285,825 shares sold, and there have been 425 shares purchased by insiders since January 2013. The month of April 2014 has seen the most insider selling.

Financials

McDonald's reported the first-quarter financial results on April 22 with the following highlights:

Revenue $6.7 billion
Net income $1.2 billion
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The six insiders sold their shares after these results.

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

Outlook

McDonald's 2014 guidance is as follows:

Net new restaurants 1,000-1,100
CapEx $2.9-$3.0 billion
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Competition

McDonald's competitors include Burger King Worldwide (BKW), and The Wendy's Company (NASDAQ:WEN). Here is a table comparing these companies.

Company MCD BKW WEN
Market Cap: 99.71B 9.27B 3.03B
Employees: 440,000 2,420 37,000
Qtrly Rev Growth (yoy): 0.02 -0.34 -0.06
Revenue: 28.11B 1.15B 2.49B
Gross Margin: 0.39 0.75 0.26
EBITDA: 10.10B 647.90M 341.82M
Operating Margin: 0.30 0.51 0.08
Net Income: 5.59B 233.70M 45.75M
EPS: 5.55 0.65 0.11
P/E: 18.15 40.54 75.96
PEG (5 yr expected): 2.35 1.77 1.31
P/S: 3.52 7.91 1.23
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McDonald's has the highest PEG ratio among these three companies.

Here is a table of these competitors' insider activities this year.

Company Insider buying / shares Insider selling / shares
BKW 0 0
WEN 10,080 18,410,986
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Only McDonald's has seen intensive insider selling during the last 30 days.

Conclusion

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

Before going short McDonald's, I would like to get a bearish confirmation from the Point & Figure chart. The two main reasons for the proposed short entry are a relatively high PEG ratio, and the intensive insider-selling activity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within 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.