Insider Trading Reports: McDonald’s (MCD)

Insider Trading Reports: McDonald’s (MCD)

Insider Trading Reports: McDonald’s (MCD)

New CEO makes $500,000 buy.

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  • The new CEO of McDonald’s, who previously owned zero shares in the firm, picked up 2,580 in his first week on the job. The total cost came to $500,000, and was made on the open market as a vote of confidence in the company. A director at the company also made a 1,300 share buy at $194,000.

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  • Insider data for the past three years shows this is the first insider buy since 2017; all other insider activity has been sales.

    Shares of McDonald’s fell following the ouster of its prior CEO for an inappropriate relationship. The fast food giant already saw shares sink from an all-time high earlier in the year of $221 into the $190 range, for a 13 percent drop from the peak.

    Action to take: The company is an industry leader, and one that tends to fare well during recessionary times. That can make it a great holding, and its decline year-to-date has brought it from being heavily overvalued more into line with the market. Shares look attractive up to $195.

    Speculators should consider the June 2020 $200 calls for a bet higher in shares in the next few months. Although shares would need to close over $207 for the option to make a profit for traders, a rise to the old high in shares of $221 would lead to a double in the option—but even then, it can likely still provide mid-double-digit returns on a bounce higher in shares.

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