Possible Bearish Signals With BJ's Wholesale Club Holdings Insiders Disposing Stock

Over the past year, many BJ's Wholesale Club Holdings, Inc. (NYSE:BJ) insiders sold a significant stake in the company which may have piqued investors' interest. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At BJ's Wholesale Club Holdings

Over the last year, we can see that the biggest insider sale was by the insider, Jeff Desroches, for US$2.6m worth of shares, at about US$90.29 per share. That means that even when the share price was below the current price of US$112, 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 37% of Jeff Desroches's holding.

Over the last year we saw more insider selling of BJ's Wholesale Club Holdings shares, than buying. 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!

Check out our latest analysis for BJ's Wholesale Club Holdings

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Does BJ's Wholesale Club Holdings Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. BJ's Wholesale Club Holdings insiders own 0.8% of the company, currently worth about US$115m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About BJ's Wholesale Club Holdings Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the BJ's Wholesale Club Holdings insiders selling. Of course, the future is what matters most. So if you are interested in BJ's Wholesale Club Holdings, you should check out this free report on analyst forecasts for the company.

Of course BJ's Wholesale Club Holdings 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.