Insider Trading Report: Red Robin Gourmet Burgers (RRGB)

Johan Hart, President and CEO at Red Robin Gourmet Burgers (RRBG), recently bought 15,000 shares. The buy increased his stake by 4 percent, and came to a total cost just over $193,000.

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  • He was joined by a company director, who bought 4,340 shares valued at $55,300. Over the past two years, insiders have been buyers of shares, at prices varying from half of where shares trade today to nearly double where shares now trade.

    Overall, insiders own 3.4 percent of shares.

    The burger chain is up 33 percent over the past year, far in excess of revenue growth of 6 percent. Overall, the chain lost money over the past year, but shares are inexpensive at 0.16 times their price to sales.

    The company’s most recent earnings show the current challenges. Comparable store sales grew well, but higher food and energy costs weighed on profitability. That reflects challenges to the industry in general, not just Red Robin.

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  • Action to take: Investors may like shares here for further upside, but the stock doesn’t pay a dividend and look more speculative compared to other fast food chains. That could mean more upside, particularly on a return to profitability.

    For traders, shares are in an uptrend. The September $15 calls, last going for about $0.85, offer mid-double-digit returns in the coming months.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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