Have Insiders Sold Preferred Bank Shares Recently?
Anyone interested in Preferred Bank (NASDAQ:PFBC) should probably be aware that the Independent Vice Chairman of the Board, Clark Hsu, recently divested US$265k worth of shares in the company, at an average price of US$106 each. On the bright side, that sale was only 2.6% of their holding, so we doubt it's very meaningful, on its own.
The Last 12 Months Of Insider Transactions At Preferred Bank
Over the last year, we can see that the biggest insider sale was by the Chairman, Li Yu, for US$959k worth of shares, at about US$102 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$107. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 1.4% of Li Yu's stake.
Over the last year, we can see that insiders have bought 4.46k shares worth US$431k. But they sold 58.48k shares for US$5.3m. Over the last year we saw more insider selling of Preferred Bank 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!
View our latest analysis for Preferred Bank
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Does Preferred Bank Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Preferred Bank insiders own 8.2% of the company, worth about US$103m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Preferred Bank Insider Transactions Indicate?
Insiders sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Preferred Bank is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Preferred Bank. Every company has risks, and we've spotted 2 warning signs for Preferred Bank (of which 1 is potentially serious!) you should know about.
Of course Preferred Bank 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.