Don't Ignore The Insider Selling In Paymentus Holdings

Some Paymentus Holdings, Inc. (NYSE:PAY) shareholders may be a little concerned to see that the Senior VP, Sanjay Kalra, recently sold a substantial US$505k worth of stock at a price of US$31.99 per share. That sale reduced their total holding by 14% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Paymentus Holdings

Paymentus Holdings Insider Transactions Over The Last Year

Notably, that recent sale by Senior VP Sanjay Kalra was not the only time they sold Paymentus Holdings shares this year. They previously made an even bigger sale of -US$1.2m worth of shares at a price of US$18.85 per share. That means that an insider was selling shares at slightly below the current price (US$27.43). 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 55% of Sanjay Kalra's stake.

Insiders in Paymentus Holdings 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. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Paymentus Holdings better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of Paymentus Holdings

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Paymentus Holdings insiders own 20% of the company, currently worth about US$687m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Paymentus Holdings Tell Us?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But since Paymentus Holdings is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Paymentus Holdings. While conducting our analysis, we found that Paymentus Holdings has 1 warning sign and it would be unwise to ignore it.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.