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Papa John Schnatter Sells Papa John's in Insider Trade

- By Jennifer Chiou

John Schnatter (Insider Trades), CEO, founder, chairman and 10% owner of Papa John's International Inc. (PZZA), sold 52,358 shares of the company on Oct. 12. The average price per share was $78.08 for a total transaction of $4,088,113. Papa John's International is the third-largest pizza delivery company with a market cap of $2.87 billion.

There is no clear linear increasing or decreasing trend in the number or volume of insider purchases made since 2013. In 2013, there were 11 insider sells totaling 99,636 shares of the company, and in the following year there were 7 insider sells totaling 87,584 shares. In 2015, the number of insider shares and total volume of insider shares sold rose to 16 transactions, totaling 609,661 shares. There have been 12 Papa John's insider sells, amounting to 384,647 shares sold, in 2016 to date. Schnetter sold 92.41% of total shares sold in 2016 to date in 9 transactions. For more information about insider trades with Papa John's, click here.

The company reported second quarter net income of $22.541 million, or 61 cents per share. In comparison, the company reported second quarter 2015 net income of $18.766 million, or 47 cents per share. Net income increased from $29.809 million in the second quarter of 2015 to $35.200 million in the second quarter of 2016. Schnatter commented that the company is pleased with its "strong second quarter results, with good comp sales leading to another quarter of excellent earnings growth."

Papa John's announced plans to expand in Mexico and Egypt in September 2016. The expansion in Mexico is in agreement with restaurant developer Orquest Foods to build 60 restaurants over the next 8 years. In Egypt, Vantage Egypt, a Papa John's franchisee for the past 10 years, entered into a development agreement to open an additional 18 units. Papa John's International is also looking to expand with potential franchisees in parts of France, Poland, Germany, Ukraine, the Czech Republic and Belgium.

In June of 2015, as part of the company's Clean Label commitment to its customers, Schnatter publicly promised the removal of 14 "unwanted" ingredients, which include artificial colors, preservatives, flavor enhancers and thickeners, from pizzas by the end of 2016. On Oct. 4, the company announced the completion of the removal of the 14 ingredients, and eluded to more changes that follow the company's clean initiative to come in the fall of 2016.

According to GuruFocus, Papa John's has a business predictability rank of 4 out of 5 stars. For more information about the business predictability rank, click here.

Jim Simons (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) both reduced their stake in Papa John's during the second quarter of 2016. Simons sold 401,368 shares at an average per share price of $60.97, reducing his stake in the company by 32.91%. The total estimated gain of the holding since its acquisition in the second quarter of 2011 is 96%. Greenblatt sold out all 10,566 shares during the second quarter of 2016. This was after reducing his stake by 67,184 shares at an average per share price of $52.56 in the first quarter of 2016. The total estimated gain of the holding was -19%. For more information about guru trades with Papa John's, click here.

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This article first appeared on GuruFocus.