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Don't Ignore The Fact That This Insider Just Sold Some Shares In Paycom Software, Inc. (NYSE:PAYC)
Anyone interested in Paycom Software, Inc. (NYSE:PAYC) should probably be aware that the Independent Director, Jason Clark, recently divested US$298k worth of shares in the company, at an average price of US$278 each. The eyebrow raising move amounted to a reduction of 18% in their holding.
Check out our latest analysis for Paycom Software
The Last 12 Months Of Insider Transactions At Paycom Software
The Founder, Chad Richison, made the biggest insider sale in the last 12 months. That single transaction was for US$2.6m worth of shares at a price of US$275 each. That means that even when the share price was slightly below the current price of US$277, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. 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 0.1% of Chad Richison's stake.
In the last year Paycom Software insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership Of Paycom Software
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Paycom Software insiders own about US$2.5b worth of shares (which is 16% of the company). 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 Paycom Software Tell Us?
An insider sold Paycom Software shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But since Paycom Software is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for Paycom Software that deserve your attention before buying any shares.
But note: Paycom Software may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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. 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.
Paycom Software, Inc. provides cloud-based human capital management (HCM) solution delivered as software-as-a-service for small to mid-sized companies in the United States.
Outstanding track record with flawless balance sheet.