In this article, I will feature one business services company that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:
- The stock was sold by three or more insiders within one month.
- The stock was not purchased by any insiders in the month of intensive selling.
- At least two sellers decreased their holdings by more than 10%.
Global Payments (GPN) provides electronic payments transaction processing services for consumers, merchants, independent sales organizations, financial institutions, government agencies, and multi-national corporations in North America, South America, Europe and the Asia-Pacific region.
Insider selling during the last 30 days
Here is a table of Global Payments' insider-trading activity during the last 30 days by insider.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Suellyn Tornay||EVP||Oct 3-8||33,608||No||29,270 shares||53.4%|
|Raymond Killian||Director||Oct 4||15,398||No||10,419 shares||59.6%|
|Paul Garcia||Director||Oct 2||154,000||Yes||571,903 shares||21.2%|
There have been 203,006 shares sold by insiders during the last 30 days. More details about the Rule 10b5-1 trading plan can be found from this link.
Insider selling by calendar month
Here is a table of Global Payments' insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 365,651 shares sold and there have been 5,000 shares purchased by insiders this year. The month of October has seen the most insider selling this year.
Global Payments reported the fiscal 2014 first-quarter, which ended August 31, financial results on October 1, with the following highlights:
|Net income||$64.6 million|
Annual fiscal 2014 GAAP diluted earnings per share is expected to be $3.40 to $3.47. Annual revenue is expected to be $2.51 billion to $2.56 billion, or 6% to 8% growth over fiscal 2013.
Global Payments has the second lowest P/S ratio among these four companies.
Here is a table of these competitors' insider-trading activities this year.
|Company||Insider buying / shares||Insider selling / shares|
Only Global Payments has seen intensive insider selling during the past 30 days.
There have been three different insiders selling Global Payments and there have not been any insiders buying Global Payments during the past 30 days. All three of these insiders decreased their holdings by more than 10%. Global Payments has an insider ownership of 0.80%.
Global Payments is trading at a P/E ratio of 18.21 and a forward P/E ratio of 12.57. Global Payments has a book value of $14.73 per share and the stock has a dividend yield of 0.14%.
Before entering short Global Payments, I would like to get a bearish confirmation from the Point and Figure chart. The main reason for the proposed short entry is the intensive insider selling activity.