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

In the last year, many BJ's Wholesale Club Holdings, Inc. (NYSE:BJ) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for BJ's Wholesale Club Holdings

BJ's Wholesale Club Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Christopher Baldwin, sold US$5.4m worth of shares at a price of US$74.53 per share. That means that an insider was selling shares at slightly below the current price (US$93.10). 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. It is worth noting that this sale was only 30% of Christopher Baldwin'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 want to know exactly who sold, for how much, and when, simply click on the graph below!

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BJ's Wholesale Club Holdings Insiders Are Selling The Stock

The last three months saw significant insider selling at BJ's Wholesale Club Holdings. In total, insiders dumped US$3.0m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. BJ's Wholesale Club Holdings insiders own about US$113m worth of shares (which is 0.9% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At BJ's Wholesale Club Holdings Tell Us?

Insiders sold BJ's Wholesale Club Holdings shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that BJ's Wholesale Club Holdings is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 1 warning sign for BJ's Wholesale Club Holdings that deserve your attention before buying any shares.

But note: BJ's Wholesale Club Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.