We'd be surprised if Paysign, Inc. (NASDAQ:PAYS) shareholders haven't noticed that the Co-Founder, Mark Newcomer, recently sold US$316k worth of stock at US$4.54 per share. However, the silver lining is that the sale only reduced their total holding by 0.7%, so we're hesitant to read anything much into it, on its own.
Paysign Insider Transactions Over The Last Year
Notably, that recent sale by Mark Newcomer is the biggest insider sale of Paysign shares that we've seen in the last year. That means that an insider was selling shares at below the current price (US$4.58). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 0.7% of Mark Newcomer's stake.
Over the last year we saw more insider selling of Paysign shares, than buying. 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!
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
Does Paysign Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 39% of Paysign shares, worth about US$91m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Paysign Tell Us?
The insider sales have outweighed the insider buying, at Paysign, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since Paysign is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! While it's good to be aware of 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. When we did our research, we found 2 warning signs for Paysign (1 is potentially serious!) that we believe deserve your full attention.
But note: Paysign 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 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.
