Some Chipotle Mexican Grill, Inc. (NYSE:CMG) shareholders may be a little concerned to see that the Chairman & CEO, Brian Niccol, recently sold a substantial US$20m worth of stock at a price of US$3,186 per share. That's a big disposal, and it decreased their holding size by 22%, which is notable but not too bad.
The Last 12 Months Of Insider Transactions At Chipotle Mexican Grill
In fact, the recent sale by Brian Niccol was the biggest sale of Chipotle Mexican Grill shares made by an insider individual in the last twelve months, according to our records. So what is clear is that an insider saw fit to sell at around the current price of US$3,160. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
Over the last year we saw more insider selling of Chipotle Mexican Grill shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Insider Ownership Of Chipotle Mexican Grill
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Chipotle Mexican Grill insiders own about US$603m worth of shares (which is 0.7% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Chipotle Mexican Grill Insiders?
Insiders sold Chipotle Mexican Grill shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Chipotle Mexican Grill is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 1 warning sign for Chipotle Mexican Grill you should be aware of.
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For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.