Have Pathward Financial Insiders Been Selling Stock?

Some Pathward Financial, Inc. (NASDAQ:CASH) shareholders may be a little concerned to see that the Executive VP & Executive Advisor to CEO, Glen Herrick, recently sold a substantial US$708k worth of stock at a price of US$50.50 per share. That sale reduced their total holding by 13% which is hardly insignificant, but far from the worst we've seen.

View our latest analysis for Pathward Financial

Pathward Financial Insider Transactions Over The Last Year

In fact, the recent sale by Glen Herrick was the biggest sale of Pathward Financial shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of US$51.16, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 13% of Glen Herrick's holding.

Happily, we note that in the last year insiders paid US$112k for 2.55k shares. On the other hand they divested 27.37k shares, for US$1.4m. Over the last year we saw more insider selling of Pathward Financial shares, than buying. You can see the insider transactions (by companies and 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Pathward Financial

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. We usually like to see fairly high levels of insider ownership. Pathward Financial insiders own about US$19m worth of shares. That equates to 1.4% 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 Do The Pathward Financial Insider Transactions Indicate?

An insider hasn't bought Pathward Financial stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. But since Pathward Financial 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. We'd practice some caution before buying! While we like knowing 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. At Simply Wall St, we've found that Pathward Financial has 2 warning signs (1 makes us a bit uncomfortable!) that deserve your attention before going any further with your analysis.

Of course Pathward Financial 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.

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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.