Yahoo Finance As PayPal Holdings, Inc. (NASDAQ:PYPL) drops to US$85b market cap, insiders might rethink their US$3.7m stock purchase earlier this year
Insiders who acquired US$3.7m worth of PayPal Holdings, Inc.'s (NASDAQ:PYPL) stock at an average price of US$110 in the past 12 months may be dismayed by the recent 6.8% price decline. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$2.5m.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for PayPal Holdings
PayPal Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Executive Vice President of Global Sales, Peggy Alford, sold US$2.1m worth of shares at a price of US$97.82 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$74.66). So it may not tell us anything about how insiders feel about the current share price. Peggy Alford was the only individual insider to sell over the last year.
In the last twelve months insiders purchased 33.36k shares for US$3.7m. On the other hand they divested 21.79k shares, for US$2.1m. In total, PayPal Holdings insiders bought more than they sold over the last year. 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!
PayPal Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does PayPal Holdings Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. PayPal Holdings insiders own 0.1% of the company, currently worth about US$106m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About PayPal Holdings Insiders?
It doesn't really mean much that no insider has traded PayPal Holdings shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like PayPal Holdings insiders think the business has merit. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 2 warning signs for PayPal Holdings you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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