ESCO Technologies Insiders Sell US$829k Of Stock, Possibly Signalling Caution

ESCO Technologies Inc. (NYSE:ESE) 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.

ESCO Technologies Insider Transactions Over The Last Year

The Independent Director, Vinod Khilnani, made the biggest insider sale in the last 12 months. That single transaction was for US$473k worth of shares at a price of US$120 each. That means that even when the share price was below the current price of US$166, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 15% of Vinod Khilnani's stake.

Insiders in ESCO Technologies didn't buy any shares in the last year. 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!

View our latest analysis for ESCO Technologies

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Insider Ownership Of ESCO Technologies

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that ESCO Technologies insiders own 0.5% of the company, worth about US$22m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The ESCO Technologies Insider Transactions Indicate?

The fact that there have been no ESCO Technologies insider transactions recently certainly doesn't bother us. Our analysis of ESCO Technologies insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for ESCO Technologies.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.