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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.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Kenneth KoziolEVPApril 23905No13,884 shares6.1%
Gloria SantonaEVPApril 2519,154No60,719 shares24.0%
Donald ThompsonCEOApril 2330,000No77,720 shares27.8%
Richard FloerschEVPApril 2419,987No42,301 shares32.1%
John RogersDirectorApril 235,000No87,500 shares5.4%
Robert EckertDirectorApril 245,000No10,000 shares33.3%

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.

MonthInsider selling / sharesInsider buying / shares
April 201480,0460
March 201400
February 201425,1100
January 201430,0000
December 201300
November 201315,9710
October 20139,680425
September 201320,0000
August 201300
July 20131,7710
June 201300
May 201300
April 201329,6110
March 201341,3640
February 20139,6000
January 201322,6720

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

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 restaurants1,000-1,100
CapEx$2.9-$3.0 billion

Competition

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

CompanyMCDBKWWEN
Market Cap:99.71B9.27B3.03B
Employees:440,0002,42037,000
Qtrly Rev Growth (yoy):0.02-0.34-0.06
Revenue:28.11B1.15B2.49B
Gross Margin:0.390.750.26
EBITDA:10.10B647.90M341.82M
Operating Margin:0.300.510.08
Net Income:5.59B233.70M45.75M
EPS:5.550.650.11
P/E:18.1540.5475.96
PEG (5 yr expected):2.351.771.31
P/S:3.527.911.23

McDonald's has the highest PEG ratio among these three companies.

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

CompanyInsider buying / sharesInsider selling / shares
BKW00
WEN10,08018,410,986

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.

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