Favourable Signals For Provident Financial Services: Numerous Insiders Acquired Stock
It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Provident Financial Services, Inc.'s (NYSE:PFS) case, it's fantastic news for shareholders.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Provident Financial Services
Provident Financial Services Insider Transactions Over The Last Year
The insider, Vito Giannola, made the biggest insider sale in the last 12 months. That single transaction was for US$147k worth of shares at a price of US$14.67 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$15.22. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 10% of Vito Giannola's stake.
Over the last year, we can see that insiders have bought 14.36k shares worth US$237k. But they sold 13.50k shares for US$224k. Overall, Provident Financial Services insiders were net buyers during the last year. 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders At Provident Financial Services Have Sold Stock Recently
The last three months saw some Provident Financial Services insider selling. The selling netted US$147k for insider Vito Giannola. But US$103k was spent on buying, too, . While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.
Does Provident Financial Services Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Provident Financial Services insiders own about US$47m worth of shares. That equates to 4.1% 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 Do The Provident Financial Services Insider Transactions Indicate?
Insider selling has just outweighed insider buying in the last three months. But the difference isn't enough to have us worried. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Provident Financial Services and their transactions don't cause us concern. 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 Provident Financial Services you should be aware of.
But note: Provident Financial Services 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.
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.
