Have Insiders Been Selling PaySauce Limited (NZSE:PYS) Shares?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in PaySauce Limited (NZSE:PYS).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

See our latest analysis for PaySauce

PaySauce Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Co-founder, Asantha Wijeyeratne, sold NZ$444k worth of shares at a price of NZ$0.50 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of NZ$0.32. So it may not shed much light on insider confidence at current levels. Asantha Wijeyeratne was the only individual insider to sell over the last year.

In the last twelve months insiders purchased 946.84k shares for NZ$333k. On the other hand they divested 1.07m shares, for NZ$444k. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Have PaySauce Insiders Traded Recently?

We saw some PaySauce insider buying shares in the last three months. Independent Non-Executive Director Jacqueline Margaret Cheyne shelled out NZ$10.0k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. PaySauce insiders own about NZ$20m worth of shares (which is 46% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At PaySauce Tell Us?

We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. It's great to see high levels of insider ownership, but looking back over the last year, we'd need to see more buying to gain confidence from the PaySauce insider transactions. While we like knowing 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. Be aware that PaySauce is showing 4 warning signs in our investment analysis, and 1 of those makes us a bit uncomfortable...

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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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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