BJ's Restaurants, Inc. (NASDAQ:BJRI) shareholders may have reason to be concerned, as several insiders sold their shares over the past year. 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, we would consider it foolish to ignore insider transactions altogether.

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. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$34.75. So it may not tell us anything about how insiders feel about the current share price.

Over the last year, we can see that insiders have bought 24.04k shares worth US$88k. But they sold 10.76k shares for US$401k. Over the last year we saw more insider selling of BJ's Restaurants shares, than buying. They sold for an average price of about US$37.29. It's not too encouraging to see that insiders have sold at below the current price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like BJ's Restaurants better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At BJ's Restaurants Have Sold Stock Recently

The last quarter saw substantial insider selling of BJ's Restaurants shares. In total, Executive VP & Chief Information Officer Brian Krakower dumped US$82k 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 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 3.5% of BJ's Restaurants shares, worth about US$28m. 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 Do The BJ's Restaurants Insider Transactions Indicate?

An insider sold BJ's Restaurants shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. But since BJ's Restaurants is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 1 warning sign with BJ's Restaurants and understanding this should be part of your investment process.

Of course BJ's Restaurants 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.