In typical fashion, stock sales by corporate insiders increased at the end of 2006, according to various market data, with at least three restaurant company chairmen joining the bandwagon and disposing of company stock in December.
The sales by the three executives were made under prearranged 10b5-1 trading plans. The 10b5-1 rule allows company insiders to set up securities trading programs in advance and then proceed with transactions even when in possession of material nonpublic information. A properly executed 10b5-1 plan typically reduces the negative stock price volatility sometimes caused by market misinterpretation of insider sales, according to experts.
Applebee’s International Inc. chairman Lloyd Hill exercised options on 60,500 shares of Applebee’s common stock for $16.25 per share and then sold 51,771 shares for about $25.04 per share, or about $1.3 million. He also disposed of 8,729 shares for payment of the exercise price or tax liability, according to a regulatory filing. His transactions were executed Dec. 21.
Shares in the Overland Park, Kan.-based Applebee’s, which operates and franchises 1,919 namesake restaurants, traded between $17.29 per share and $26.47 per share during the 52 weeks ended Dec. 29. Hill still holds 294,232 Applebee’s shares.
The executive chairman of Deerfield, Ill.-based Così Inc., William Forrest, sold 25,000 shares of Così stock for per-share prices between $5.13 and $5.42, according to a regulatory filing posted Dec. 22. Così’s 52-week, per-share trading high was $11.21, and its low was $4.20. Forrest retains 646,407 shares in Così, the operator or franchisor of 118 fast-casual units.
Steve Ells, the chairman and chief executive of Chipotle Mexican Grill Inc., sold 5,000 shares of his company’s common stock Dec. 26 for prices ranging from $52.24 per share to $52.89 per share, and a week earlier sold 14,000 shares at per-share prices between $51.99 and $52.37, according to regulatory filings. Ells retains 910,050 shares in Denver-based Chipotle, which operates or franchises 547 namesake fast-casual restaurants. The company’s shares traded between $39.51 per share and $67.77 per share during the 52 weeks ended Dec. 29.