Over the last year, a good number of insiders have significantly increased their holdings in PayPal Holdings, Inc. (NASDAQ:PYPL). This is encouraging because it indicates that insiders are more optimistic about the company’s prospects.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for PayPal Holdings
The Last 12 Months Of Insider Transactions At PayPal Holdings
Over the last year, we can see that the biggest insider sale was by the Executive Vice President of Global Sales, Peggy Alford, for US$2.1m worth of shares, at about US$97.82 per share. So what is clear is that an insider saw fit to sell at around the current price of US$95.03. While we don’t usually like to see insider selling, it’s more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. The only individual insider seller over the last year was Peggy Alford.
In the last twelve months insiders purchased 47.46k shares for US$6.4m. But insiders sold 21.79k shares worth US$2.1m. Overall, PayPal Holdings insiders were net buyers during the last year. The average buy price was around US$136. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
PayPal Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
PayPal Holdings Insiders Are Selling The Stock
The last three months saw significant insider selling at PayPal Holdings. In total, Executive Vice President of Global Sales Peggy Alford sold US$2.1m worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership
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. PayPal Holdings insiders own 0.1% of the company, currently worth about US$135m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The PayPal Holdings Insider Transactions Indicate?
An insider hasn’t bought PayPal Holdings stock in the last three months, but there was some selling. In contrast, they appear keener if you look at the last twelve months. We are also comforted by the high levels of insider ownership. So the recent selling doesn’t worry us. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. In terms of investment risks, we’ve identified 3 warning signs with PayPal Holdings and understanding these should be part of your investment process.
But note: PayPal Holdings 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.
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