Director Of BJ's Restaurants Sold 88% Of Their Shares

We wouldn't blame BJ's Restaurants, Inc. (NASDAQ:BJRI) shareholders if they were a little worried about the fact that Gregory Trojan, the Director recently netted about US$6.0m selling shares at an average price of US$44.64. Probably the most concerning element of the whole transaction is that the disposal amounted to 88% of their entire holding.

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BJ's Restaurants Insider Transactions Over The Last Year

Notably, that recent sale by Gregory Trojan is the biggest insider sale of BJ's Restaurants shares that we've seen in the last year. That means that even when the share price was slightly below the current price of US$44.83, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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. It is worth noting that this sale was 88% of Gregory Trojan's holding.

Over the last year, we can see that insiders have bought 3.00k shares worth US$88k. But they sold 139.90k shares for US$6.2m. In total, BJ's Restaurants insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for BJ's Restaurants

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Insider Ownership Of BJ's Restaurants

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 Restaurants insiders own about US$39m worth of shares. That equates to 4.0% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About BJ's Restaurants Insiders?

Insiders sold BJ's Restaurants shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of BJ's Restaurants.

But note: BJ's Restaurants 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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