Stock Analysis

What You Need To Know About Esquire Financial Holdings, Inc.'s (NASDAQ:ESQ) Investor Composition

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NasdaqCM:ESQ
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The big shareholder groups in Esquire Financial Holdings, Inc. (NASDAQ:ESQ) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Esquire Financial Holdings is not a large company by global standards. It has a market capitalization of US$162m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Esquire Financial Holdings.

See our latest analysis for Esquire Financial Holdings

ownership-breakdown
NasdaqCM:ESQ Ownership Breakdown January 10th 2021

What Does The Institutional Ownership Tell Us About Esquire Financial Holdings?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Esquire Financial Holdings. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Esquire Financial Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NasdaqCM:ESQ Earnings and Revenue Growth January 10th 2021

It looks like hedge funds own 10% of Esquire Financial Holdings shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Basswood Capital Management, L.L.C. is currently the largest shareholder, with 10% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.7% and 5.4%, of the shares outstanding, respectively. Additionally, the company's CEO Andrew Sagliocca directly holds 2.3% of the total shares outstanding.

A closer look at our ownership figures suggests that the top 14 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Esquire Financial Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in Esquire Financial Holdings, Inc.. Insiders have a US$24m stake in this US$162m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 33% ownership, the general public have some degree of sway over Esquire Financial Holdings. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Esquire Financial Holdings .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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About NasdaqCM:ESQ

Esquire Financial Holdings

Esquire Financial Holdings, Inc. operates as the bank holding company for Esquire Bank, National Association that provides commercial banking products and services to legal industry and small businesses, and commercial and retail customers in the United States.

Flawless balance sheet with solid track record.