Don't Ignore The Fact That This Insider Just Sold Some Shares In Provident Financial Holdings, Inc. (NASDAQ:PROV)

Anyone interested in Provident Financial Holdings, Inc. (NASDAQ:PROV) should probably be aware that the Independent Director, Bruce Bennett, recently divested US$224k worth of shares in the company, at an average price of US$16.81 each. That sale was 18% of their holding, so it does make us raise an eyebrow.

See our latest analysis for Provident Financial Holdings

The Last 12 Months Of Insider Transactions At Provident Financial Holdings

Notably, that recent sale by Bruce Bennett is the biggest insider sale of Provident Financial Holdings shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (US$17.22). 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. 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 just 18% of Bruce Bennett's stake.

In the last twelve months insiders purchased 3.00k shares for US$42k. On the other hand they divested 15.00k shares, for US$252k. Bruce Bennett ditched 15.00k shares over the year. The average price per share was US$16.83. 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!

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Insider Ownership

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 9.2% of Provident Financial Holdings shares, worth about US$12m. 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 Does This Data Suggest About Provident Financial Holdings Insiders?

An insider hasn't bought Provident Financial Holdings stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! 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. You'd be interested to know, that we found 1 warning sign for Provident Financial Holdings and we suggest you have a look.

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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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