Don't Ignore The Insider Selling In Esquire Financial Holdings

Some Esquire Financial Holdings, Inc. (NASDAQ:ESQ) shareholders may be a little concerned to see that the Independent Director, Selig Zises, recently sold a substantial US$614k worth of stock at a price of US$76.77 per share. However, that sale only accounted for 3.6% of their holding, so arguably it doesn't say much about their conviction.

Check out our latest analysis for Esquire Financial Holdings

Esquire Financial Holdings Insider Transactions Over The Last Year

Notably, that recent sale by Independent Director Selig Zises was not the only time they sold Esquire Financial Holdings shares this year. Earlier in the year, they fetched US$50.29 per share in a -US$1.1m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$77.69. 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 8.3% of Selig Zises's holding.

Esquire Financial Holdings insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insider Ownership Of Esquire Financial Holdings

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Esquire Financial Holdings insiders own about US$105m worth of shares (which is 17% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Esquire Financial Holdings Insiders?

An insider hasn't bought Esquire Financial Holdings stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But since Esquire Financial Holdings is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Esquire Financial Holdings has 1 warning sign and it would be unwise to ignore it.

But note: Esquire Financial Holdings 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.

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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.