A recent form 4 filing with the SEC revealed that Evercore founder Roger Altman no longer owns shares in the company. With Evercore’s stock up 21.9% in the last six months, it’s worth taking a closer at the insider activity.
Insider Selling: Evercore
A number of top executives have been selling shares of Evercore (NYSE: EVR) according to filings with the SEC including Roger Altman (Founder), Ralph Schlosstein (CEO), Adam Frankel (General Counsel) and Andrew Sibbald (CEO, International). Total insider selling has totaled $47.3 million since November which is approximately 1.1% of Evercore’s total market capitalization.
| Insider Trading | Relationship | Date | #Shares | Value ($) |
|---|---|---|---|---|
| Roger Altman | Founder and Sr Chairman | Feb 05 | 57,146 | $5,487,815 |
| Roger Altman | Founder and Sr Chairman | Feb 05 | 35,276 | $3,418,324 |
| Ralph Schlosstein | President and CEO | Feb 02 | 12,800 | $1,280,923 |
| Roger Altman | Founder and Sr Chairman | Feb 02 | 41,729 | $4,171,223 |
| Roger Altman | Founder and Sr Chairman | Feb 02 | 42,836 | $4,282,005 |
| Ralph Schlosstein | President and CEO | Feb 01 | 25,000 | $2,541,273 |
| Roger Altman | Founder and Sr Chairman | Feb 01 | 26,125 | $2,660,074 |
| Roger Altman | Founder and Sr Chairman | Feb 01 | 21,888 | $2,227,352 |
| Ralph Schlosstein | President and CEO | Nov 29 | 118,144 | $10,295,328 |
| Ralph Schlosstein | President and CEO | Nov 28 | 100,000 | $8,543,570 |
| Ralph Schlosstein | President and CEO | Nov 27 | 9,500 | $818,637 |
| Adam Frankel | General Counsel | Nov 24 | 3,000 | $255,483 |
| Adam Frankel | General Counsel | Nov 21 | 2,000 | $174,764 |
| Adam Frankel | General Counsel | Nov 16 | 1,000 | $82,600 |
| Andrew Sibbald | CEO EVR International | Nov 14 | 12,000 | $1,001,159 |
| Adam Frankel | General Counsel | Nov 14 | 1,000 | $84,437 |
| TOTAL | 509,444 | $47,324,967 |
Should Investors Be Concerned?
Evercore operates as an independent investment banking advisory firm worldwide. The company operates through two segments, Investment Banking and Investment Management.
Roger Altman founded Evercore in 1995 after a brief stint in politics advising the Clinton administration. Within two decades Altman was able to transform Evercore from a boutique bank to a powerhouse that’s now valued at over $4 billion.
So with Altman’s ownership stake effectively reduced to zero, should investors be concerned about the firm’s long-term prospects?
Evercore’s Stock Price and Valuation
The company’s shares last traded at $93.85, up 21.9% in the last six months but only up 17.2% over the last year.
source: finbox.io
Analysts covering the stock often compare the company to a peer group that includes Houlihan Lokey (NYSE: HLI), Stifel Financial (NYSE: SF), Moelis (NYSE: MC) and Raymond James (NYSE: RJF). Analyzing Evercore’s valuation metrics and ratios relative to these comparable companies provides further insight into the stock’s valuation.
Return on Equity (ROE) measures a company’s profitability in relation to the book value of Shareholders’ Equity. ROE is a measure of how effectively management makes investments to generate earnings for shareholders.
The company’s ROE of 28.9% is above all of its selected comparable public companies as shown below.
source: finbox.io
Although Evercore’s returns have outperformed peers, its P/E multiple trades at a discount. The company’s LTM P/E multiple of 20.3x is below HLI (22.0x), SF (21.9x), MC (40.9x) and RJF (20.9x).
source: finbox.io
Evercore’s valuation actually looks attractive in comparison to peers. Therefore, investors should likely not be too concerned with the recent insider selling. The company’s fundamentals remain strong.
Here are a few more metrics that investors should consider prior to making an investment decision:
Valuation: what is Evercore’s price to book ratio and how does it compare to its peers? Analyze Price / Book here.
Forecast: what is Evercore’s projected earnings growth? Is the company expected to grow faster or slower relative to its peers? Analyze projected earnings growth here.
Efficiency: how much free cash flow does Evercore generate as a percentage of total sales? Has it been increasing or decreasing over time? Review the firm’s free cash flow margin here.
Author: Brian Dentino
Expertise: financial technology, analyzing market trends
Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors.
Brian can be reached at brian@finbox.io.
As of this writing, Brian did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.