Investors who take an interest in Provident Bancorp, Inc. (NASDAQ:PVBC) should definitely note that the Director, Dennis Pollack, recently paid US$11.47 per share to buy US$115k worth of the stock. That's a very decent purchase to our minds and it grew their holding by a solid 27%.
The Last 12 Months Of Insider Transactions At Provident Bancorp
Notably, that recent purchase by Dennis Pollack is the biggest insider purchase of Provident Bancorp shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of US$11.08. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
While Provident Bancorp insiders bought shares during the last year, they didn't sell. They paid about US$10.45 on average. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. 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!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership Of Provident Bancorp
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Provident Bancorp insiders own about US$8.0m worth of shares (which is 4.3% of the company). Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The Provident Bancorp Insider Transactions Indicate?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Provident Bancorp insiders are reasonably well aligned, and optimistic for the future. While it's good to be aware of 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. For example - Provident Bancorp has 1 warning sign we think you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
