We wouldn't blame Wingstop Inc. (NASDAQ:WING) shareholders if they were a little worried about the fact that Donnie Upshaw, the Senior VP of Corporate Restaurants & Chief People Officer recently netted about US$1.1m selling shares at an average price of US$165. That diminished their holding by a very significant 97%, which arguably implies a strong desire to reallocate capital.
Notably, that recent sale by Donnie Upshaw is the biggest insider sale of Wingstop shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of US$172. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was 97% of Donnie Upshaw's holding.
Wingstop insiders didn't buy any shares over the last year. 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!
I will like Wingstop better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Wingstop insiders own 0.3% of the company, worth about US$16m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
An insider sold Wingstop shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But since Wingstop is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To help with this, we've discovered 3 warning signs (2 are concerning!) that you ought to be aware of before buying any shares in Wingstop.
Of course Wingstop may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.