Insiders Of Escalade Retain US$882k Of Investment Selling At Higher Prices

Despite a 12% gain in Escalade, Incorporated's (NASDAQ:ESCA) stock price this week, shareholders shouldn't let up. The fact that insiders chose to dispose of US$882k worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Escalade

In the last twelve months, the biggest single sale by an insider was when the Chairman, Walter Glazer, sold US$667k worth of shares at a price of US$19.83 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$20.88. 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. 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. This single sale was just 7.5% of Walter Glazer's stake.

In the last year Escalade insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Escalade

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Escalade Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Escalade. In total, Chairman Walter Glazer sold US$667k 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.

Insider Ownership Of Escalade

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 28% of Escalade shares, worth about US$77m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Escalade Insiders?

An insider sold Escalade shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Escalade is growing earnings. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 2 warning signs for Escalade (of which 1 doesn't sit too well with us!) you should know about.

Of course Escalade may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.