PaySauce Up 11%, But Some Insiders Miss Out
Despite the fact that PaySauce Limited (NZSE:PYS) stock rose 11% last week, insiders who sold NZ$270k worth of stock in the previous 12 months are likely to be better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of NZ$0.26, which is higher than the current price, may have been the best decision.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At PaySauce
Over the last year, we can see that the biggest insider sale was by the insider, Troy Tarrant, for NZ$240k worth of shares, at about NZ$0.26 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is NZ$0.20. So it may not tell us anything about how insiders feel about the current share price.
All up, insiders sold more shares in PaySauce than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
See our latest analysis for PaySauce
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 PaySauce 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. I reckon it's a good sign if insiders own a significant number of shares in the company. PaySauce insiders own 49% of the company, currently worth about NZ$16m 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 PaySauce Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the PaySauce insiders selling. 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. Our analysis shows 5 warning signs for PaySauce (1 is a bit concerning!) and we strongly recommend you look at them before investing.
But note: PaySauce 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.