Trade Alert: Independent Director Of Enterprise Financial Services Richard Sanborn Has Sold Stock

We wouldn't blame Enterprise Financial Services Corp (NASDAQ:EFSC) shareholders if they were a little worried about the fact that Richard Sanborn, the Independent Director recently netted about US$5.1m selling shares at an average price of US$53.73. That's a big disposal, and it decreased their holding size by 40%, which is notable but not too bad.

View our latest analysis for Enterprise Financial Services

Enterprise Financial Services Insider Transactions Over The Last Year

Notably, that recent sale by Richard Sanborn is the biggest insider sale of Enterprise Financial Services shares that we've seen in the last year. That means that an insider was selling shares at below the current price (US$54.00). 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 40% of Richard Sanborn's holding.

Richard Sanborn divested 96.92k shares over the last 12 months at an average price of US$53.54. 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!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 4.1% of Enterprise Financial Services shares, worth about US$82m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Enterprise Financial Services Insider Transactions Indicate?

An insider hasn't bought Enterprise Financial Services stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Enterprise Financial Services. Be aware that Enterprise Financial Services is showing 2 warning signs in our investment analysis, and 1 of those is concerning...

But note: Enterprise 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com