Sheep outside circle wanders (5)
I believe the answer is:
roams
'wanders' is the definition.
('roam' can be a synonym of 'wander')
'sheep outside circle' is the wordplay.
'sheep' becomes 'rams' (male sheep).
'outside' is an insertion indicator (some letters go outside others).
'circle' becomes 'O' (O is a circle).
'rams' going around 'o' is 'ROAMS'.
(Other definitions for roams that I've seen before include "Wanders about, rambles" , "Is traveller" .)