The stock of casual dining restaurant chain, Red Robin Gourmet Burgers Inc. (NASDAQ: RRGB), saw unusual activity in April. First, the CEO of the company, Stephen E. Carley, sold off 2500 shares on Tuesday, 15th April. Following Carley's sale, over 165,000 shares of Red Robin Gourmet Burgers were traded on Wednesday, 16th April. The Securities and Exchanges Commission (SEC) has disclosed that Carley indeed conducted the transaction and the legal filing is available online.
According to the information available, Carley sold off his stock at an average price of $67.26 per share. The total value of the transaction was $168,150. After the sale, the CEO's holding in the company has decreased and he now owns 21,336 shares. The combined value of the shares, at present market value, is around $1.5 million.
There was an upward trend in the stock price of Red Robin Gourmet Burgers the day after Carley's transaction. Whether the sale of shares caused the trend cannot be determined with certainty. That being said, the price went up 0.46 percent and closed at $68.03. Following the sale, market analysts changed their ratings of the stock. Zacks had assigned a neutral rating to the stock at the start of the month. While Zacks didn't change their rating, they have readjusted the target price of the stock to $76.
On the other hand, EVA Dimensions changed its rating, upgrading it from underweight to hold. As far as other analysts are concerned, seven of them have a buy rating on the stock while five others have kept it on hold. Averaging out the ratings given by all analysts, the stock of Red Robin Gourmet Burgers is buy with a target price of $83.
The company's performance over the past year has been consistent. The 52-week low price of the stock was $43, which the company has clearly exceeded now and it is unlikely it will hit that level in the near future. The 52-week high for the stock is $86.83, which is close to the target price for the stock defined by most investment analysts.
Other key indicators of the company's performance are also healthy. The 50-day moving average is $72.61. The moving average over 200 days is $72.87, again quite close to the 50-day average. The price to earnings ratio of the company is 30.50 and its market cap is just shy of a billion dollars.
Even in the past quarter, the company outdid expectations by posting earnings per share of $0.62. The Thomson Reuters (NYSE: TRI) consensus had predicted that the earnings per share for Red Robin Gourmet Burgers would be $0.59. The company had revenues of $241.9 million for the same quarter, which was less than the estimate. Compared to performance from the previous year, it was a 0.5 percent improvement, which showed that the company is moving in the right direction.
Taking all this into account, it does appear as though the CEO's decision to sell off 2500 shares was a random, one-off transaction and in no way reflects the performance of the company and its stock price.