Trading alert: Independent director of Enterprise Financial Services Richard Sanborn has sold shares

We would not blame Enterprise Financial Services Corp (NASDAQ:EFSC) shareholders if they are a little concerned that Richard Sanborn, the Independent Director, recently made around $5.1 million by selling shares at an average price of $53.73. That’s a big sale and reduced their holding size by 40%, which is notable but not too bad.

Check out our latest analysis for Enterprise Financial Services

Insider transactions in corporate financial services last year

Notably, this recent sale by Richard Sanborn is the largest insider sale of Enterprise Financial Services shares we’ve seen in the last year. That means an insider sold shares below the current price ($54.00). If an insider is selling below the current price, it suggests they thought that lower price was fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling isn’t a positive sign, we can’t be sure it means insiders think the shares are fully valued, so it’s only a weak sign. It’s worth noting that this sale only involved 40% of Richard Sanborn’s shares.

Richard Sanborn has sold 96.92K shares in the last 12 months at an average price of $53.54. You can see the insider transactions (by companies and individuals) over the last year in the graph below. If you click on the graph, you can see all the individual transactions, including share price, individual, and date!

For those who like to find hidden gems The free A list of small-cap companies with recent insider buying might be just the thing.

Insider ownership

For a common shareholder, it’s worth checking how many shares are held by company insiders. We typically like to see relatively high levels of insider ownership. Insiders own 4.1% of Enterprise Financial Services’ shares, worth about US$82 million. We’ve certainly seen higher levels of insider ownership elsewhere, but these levels are enough to indicate alignment between insiders and the other shareholders.

So what do insider transactions mean in the enterprise financial services sector?

An insider has not bought any shares of Enterprise Financial Services in the last three months, but there have been some selling. And even if we look at the last year, we have not seen any buying. Insiders own shares, but we are still quite cautious given the sales history. So we would only buy after careful consideration. In addition to knowing about ongoing insider transactions, it is beneficial to identify the risks facing Enterprise Financial Services. Note that Enterprise Financial Services 2 warning signals in our investment analysisand one of them is worrying…

But please note: Enterprise Financial Services may not be the best stock to buySo take a look at the free List of interesting companies with high return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulator. Currently, we only consider open market transactions and private disposals of direct holdings, but not derivative transactions or indirect holdings.

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