We wouldn't blame Portillo's Inc. (NASDAQ:PTLO) shareholders if they were a little worried about the fact that Michael Osanloo, the President recently netted about US$680k selling shares at an average price of US$10.29. That's a big disposal, and it decreased their holding size by 46%, which is notable but not too bad.

The Last 12 Months Of Insider Transactions At Portillo's

In fact, the recent sale by Michael Osanloo was the biggest sale of Portillo's shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of US$11.05, 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 46% of Michael Osanloo's stake.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company 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. Portillo's insiders own about US$25m worth of shares. That equates to 3.2% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Portillo's Insider Transactions Indicate?

An insider hasn't bought Portillo's stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But since Portillo's is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Portillo's. At Simply Wall St, we've found that Portillo's has 2 warning signs (1 makes us a bit uncomfortable!) that deserve your attention before going any further with your analysis.

Of course Portillo's 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.