Selling PROG Holdings Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

PROG Holdings, Inc.'s (NYSE:PRG) value has fallen 13% in the last week, but insiders who sold US$7.4m worth of stock over the last year have had less success. The average selling price of US$48.40 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for PROG Holdings

The Last 12 Months Of Insider Transactions At PROG Holdings

In the last twelve months, the biggest single sale by an insider was when the Co-Founder & Director, Curtis Doman, sold US$3.9m worth of shares at a price of US$49.27 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$42.10. So it may not tell us anything about how insiders feel about the current share price.

Insiders in PROG Holdings didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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PROG Holdings Insiders Are Selling The Stock

The last three months saw significant insider selling at PROG Holdings. Specifically, insiders ditched US$7.4m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

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. It appears that PROG Holdings insiders own 2.1% of the company, worth about US$39m. 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 PROG Holdings Insider Transactions Indicate?

Insiders sold PROG Holdings shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. On the plus side, PROG Holdings makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! 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. Case in point: We've spotted 4 warning signs for PROG Holdings you should be aware of, and 1 of these doesn't sit too well with us.

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 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.