We’d be surprised if Preferred Bank (NASDAQ:PFBC) shareholders haven’t noticed that the Independent Director, Wayne Wu, recently sold US$404k worth of stock at US$60.51 per share. The eyebrow raising move amounted to a reduction of 45% in their holding.
The Last 12 Months Of Insider Transactions At Preferred Bank
Notably, that recent sale by Independent Director Wayne Wu was not the only time they sold Preferred Bank shares this year. Earlier in the year, they fetched US$47.53 per share in a -US$475.3k sale. That means that an insider was selling shares at slightly below the current price (US$62.24). 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. While insider selling is not a positive sign, we can’t be sure if it does mean insiders think the shares are fully valued, so it’s only a weak sign. This single sale was 99% of Wayne Wu’s stake.
Insiders in Preferred Bank didn’t buy any shares in 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!
I will like Preferred Bank better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership of Preferred Bank
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 8.5% of Preferred Bank shares, worth about US$76m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Preferred Bank Insiders?
Insiders haven’t bought Preferred Bank stock in the last three months, but there was some selling. And even if we look to the last year, we didn’t see any purchases. On the plus side, Preferred Bank makes money, and is growing profits. While insiders do own shares, they don’t own a heap, and they have been selling. So we’d only buy after careful consideration. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Preferred Bank.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.
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