Numerous BJ's Restaurants Insiders Sold Stock: Not A Positive Omen

Quite a few BJ's Restaurants, Inc. (NASDAQ:BJRI) insiders sold their shares over the past year, which may be a cause for concern. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for BJ's Restaurants

The Last 12 Months Of Insider Transactions At BJ's Restaurants

The Senior Vice President of Brewing Operations, Alexander Puchner, made the biggest insider sale in the last 12 months. That single transaction was for US$262k worth of shares at a price of US$38.27 each. That means that an insider was selling shares at around the current price of US$35.41. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Over the last year, we can see that insiders have bought 24.04k shares worth US$88k. But insiders sold 8.44k shares worth US$319k. In total, BJ's Restaurants insiders sold more than they bought over the last year. The sellers received a price of around US$37.75, on average. We don't gain confidence from insider selling below the recent share price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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BJ's Restaurants Insiders Bought Stock Recently

It's good to see that BJ's Restaurants insiders have made notable investments in the company's shares. Overall, two insiders shelled out US$88k for shares in the company -- and none sold. That shows some optimism about the company's future.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. BJ's Restaurants insiders own about US$27m worth of shares. That equates to 3.4% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

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

It's certainly positive to see the recent insider purchases. On the other hand the transaction history, over the last year, isn't so positive. We don't take much heart from transactions by BJ's Restaurants insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. In short they are likely aligned with shareholders. 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. Case in point: We've spotted 1 warning sign for BJ's Restaurants you should be aware of.

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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.