Don't Ignore The Insider Selling In Provident Financial Services

We'd be surprised if Provident Financial Services, Inc. (NYSE:PFS) shareholders haven't noticed that an insider, Walter Sierotko, recently sold US$325k worth of stock at US$21.10 per share. That sale was 26% of their holding, so it does make us raise an eyebrow.

Check out our latest analysis for Provident Financial Services

The Last 12 Months Of Insider Transactions At Provident Financial Services

Notably, that recent sale by Walter Sierotko is the biggest insider sale of Provident Financial Services shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$21.32. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 26% of Walter Sierotko's holding.

Over the last year, we can see that insiders have bought 1.96k shares worth US$31k. But insiders sold 32.42k shares worth US$631k. All up, insiders sold more shares in Provident Financial Services than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. 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: Most of them are flying under the radar).

Does Provident Financial Services Boast High Insider Ownership?

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. Provident Financial Services insiders own about US$95m worth of shares. That equates to 3.4% 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 Does This Data Suggest About Provident Financial Services Insiders?

Insiders sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. 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. For example, Provident Financial Services has 5 warning signs (and 1 which is a bit concerning) we think you should know about.

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.

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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.