Equity Bancshares Insiders Sell US$545k Of Stock, Possibly Signalling Caution

Equity Bancshares, Inc. (NYSE:EQBK) shareholders might have a reason to worry after multiple insiders sold their shares over the last year. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Equity Bancshares

Equity Bancshares Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Gregory Gaeddert, sold US$246k worth of shares at a price of US$40.99 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$42.43. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 15% of Gregory Gaeddert's holding.

Happily, we note that in the last year insiders paid US$147k for 4.90k shares. But insiders sold 15.35k shares worth US$545k. All up, insiders sold more shares in Equity Bancshares than they bought, over the last year. The sellers received a price of around US$35.53, on average. It's not too encouraging to see that insiders have sold at below the current price. Since insiders sell for many reasons, we wouldn't put too much weight on it. 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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Equity Bancshares Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Equity Bancshares shares. Specifically, insiders ditched US$261k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does Equity Bancshares Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Equity Bancshares insiders own about US$43m worth of shares. That equates to 6.7% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Equity Bancshares Tell Us?

Insiders sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of Equity Bancshares.

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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.