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Read This Before Buying Provident Financial Services, Inc. (NYSE:PFS) Shares

Simply Wall St

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We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Provident Financial Services, Inc. (NYSE:PFS).

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for Provident Financial Services

Provident Financial Services Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive VP & Chief Credit Officer of the Provident Bank, Brian Giovinazzi, for US$193k worth of shares, at about US$26.78 per share. So we know that an insider sold shares at around the present share price of US$24.39. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Over the last year, we can see that insiders have bought 5000 shares worth US$129k. But they sold 15340 for US$399k. All up, insiders sold more shares in Provident Financial Services than they bought, over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

NYSE:PFS Recent Insider Trading, July 2nd 2019

I will like Provident Financial Services better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders at Provident Financial Services Have Sold Stock Recently

Over the last three months, we've seen a bit of insider selling at Provident Financial Services. US$71k worth of shares were sold by Lead Director Carlos Hernandez. But at least we saw US$25k worth of buying. 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?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Provident Financial Services insiders own about US$46m worth of shares. That equates to 2.8% 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 Provident Financial Services Insiders?

We note that there's been a little more insider selling than buying, recently. But the net divestment is not enough to concern us at all. Recent sales exacerbate our caution arising from analysis of Provident Financial Services insider transactions. But it's good to see that insiders own shares in the company. Of course, the future is what matters most. So if you are interested in Provident Financial Services, you should check out this free report on analyst forecasts for the company.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.