It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Provident Financial Services, Inc. (NYSE:PFS).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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The Last 12 Months Of Insider Transactions At Provident Financial Services
In the last twelve months, the biggest single sale by an insider was when Edward O’Donnell sold US$305k worth of shares at a price of US$25.92 per share. So what is clear is that an insider saw fit to sell at around the current price of US$24.97. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
Over the last year, we can see that insiders have bought 3.80k shares worth US$99k. But insiders sold 20.39k shares worth US$532k. In total, Provident Financial Services insiders sold more than they bought over the last year. They sold for an average price of about US$26.10. It’s not ideal to see that insiders have sold at around the current price. Since insiders sell for many reasons, we wouldn’t put too much weight on it. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Provident Financial Services Insiders Bought Stock Recently
Over the last three months, we’ve seen a bit of insider buying at Provident Financial Services. Director James Dunigan purchased US$25k worth of shares in that period. It’s good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Provident Financial Services insiders own 2.6% of the company, worth about US$44m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Provident Financial Services Tell Us?
We note a that there has been a tad more insider buying than selling, recently. But the difference isn’t much. We don’t take much encouragement from the transactions by Provident Financial Services insiders. But it’s good to see that insiders own shares in the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Provident Financial Services.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.