PGC

Peapack-Gladstone Financial ($PGC) Directors Buy $265K in Shares Despite Executive Selling, Signaling Undervaluation

04/01/2025 15:59

Recent stock purchases by two board members at Peapack-Gladstone Financial Corp ($PGC) are drawing investor attention amid a backdrop of consistent selling by company executives. On March 31, 2025, Director F. Duffield Meyercord acquired 6,316 shares for approximately $179,608, while Director Edward A. Gramigna Jr. purchased 3,000 shares for about $85,280. The directors' average purchase price of $28.44 represents a roughly 25% discount from $PGC's 52-week high of $37.88. These director purchases stand in sharp contrast to the selling pattern established by executives over the past six months. President Douglas L. Kennedy executed three consecutive sales in March 2025 alone, offloading a total of 30,000 shares at an average price of $29.09. Officer John P. Babcock also sold a combined 18,000 shares across three transactions over the past eight months. $PGC, a small-cap regional bank headquartered in New Jersey with a market capitalization of approximately $500 million, recently completed its rebranding from Peapack-Gladstone Bank to Peapack Private Bank & Trust. The company focuses primarily on private banking and wealth management services for affluent clients. In its latest financial report released in January 2025, $PGC significantly exceeded analyst expectations, reporting earnings of 52 cents per share against forecasts of 46 cents. Revenue also outperformed, increasing 14% to $61.84 million. However, earnings growth for full-year 2024 declined by 32.48% compared to 2023, reflecting broader concerns about commercial real estate (CRE) exposure across the banking sector. These CRE concerns were highlighted in June 2024 when Moody's placed $PGC and five other U.S. regional banks on review for potential downgrade due to their significant commercial real estate loan portfolios. Such exposure has been pressuring asset quality and profitability across regional banking institutions. $PGC's share price has experienced considerable volatility over the past year. After starting around $21 in June 2024, the stock climbed to over $37 by November 2024 before correcting to current levels around $29. Notably, executive sales have generally occurred at higher price points ($32-36), while the recent director purchases came at relatively lower levels. Currently, $PGC trades at a price-to-earnings (P/E) ratio of 15.77, with a forward P/E of 10.67. The company offers a dividend yield of 0.68%, and analysts have set a target price of $44.00, suggesting a 51.46% upside potential from current levels. Wall Street analysts maintain an average 'buy' rating on $PGC. Despite the challenging environment facing regional banks, the company's strengthened focus on private banking and expansion into New York City announced in April 2024 are viewed as positive developments. A notable aspect of the insider trading pattern is that despite consistent selling by executives, directors have stepped in with substantial purchases during a period of share price weakness. The director purchases represent what some investors consider a 'cluster buying' pattern, where multiple insiders buy within a limited timeframe, often interpreted as a strong signal of confidence in the company's intrinsic value. $PGC's debt-to-equity ratio stands at 25.6%, which is relatively healthy compared to industry averages. Additionally, its price-to-book ratio of 0.8 indicates the company is trading below book value. These valuation metrics likely influenced the directors' buying decisions. Historically, purchases by board members often reflect insiders' judgment that shares are undervalued. In $PGC's case, while commercial real estate concerns and general investment sentiment toward regional banks may have pressured the stock, directors appear to maintain confidence in the company's long-term prospects.

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