Some Yum! Brands, Inc. (NYSE:YUM) shareholders may be a little concerned to see that the Chief Executive Officer of Pizza Hut Division, Aaron Powell, recently sold a substantial US$963k worth of stock at a price of US$160 per share. That sale reduced their total holding by 33% which is hardly insignificant, but far from the worst we've seen.

The Last 12 Months Of Insider Transactions At Yum! Brands

Notably, that recent sale by Chief Executive Officer of Pizza Hut Division Aaron Powell was not the only time they sold Yum! Brands shares this year. They previously made an even bigger sale of -US$1.9m worth of shares at a price of US$161 per share. That means that even when the share price was slightly below the current price of US$165, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. 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. This single sale was just 45% of Aaron Powell's stake.

In the last year Yum! Brands insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Yum! Brands better if I see some big insider buys.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.2% of Yum! Brands shares, worth about US$78m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Yum! Brands Tell Us?

Insiders sold Yum! Brands shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. On the plus side, Yum! Brands makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

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.