Insider transactions can give investors a more complete view of activity within the world’s publicly-listed companies. No one has more information in relation to a company’s prospects than its executives and directors.
In this report, we are going to highlight some interesting insider trading cases at Global Payments Inc (GPN:US). Global Payments is a payments technology company that provides software and services to customers globally. The group serves over 3.5 million customers in 100 countries, processing nearly 60 billion transactions every year. It is listed on the New York Stock Exchange and currently has a market cap of approximately $25.62 billion.
Insider Buying at Global Payments
Our data shows that on December 12, board member Bob Baldwin Jr. purchased 3,400 GPN shares at a price of $98.62 per share. This trade cost the insider $335,308 and increased his holding to 38,940 shares.
Mr. Baldwin has considerable experience in the payments industry. Previously, he served as the Vice Chairman of Heartland Payment Systems from June 2012 until the closing of the company’s merger with Global Payments in April 2016. Before this, he served as Heartland’s CFO between 2000 and 2007 and President between 2007 to 2012.
He also has investment experience. Earlier in his career, he was an investment banker with Citicorp and Smith Barney. At Smith Barney, he served as a Managing Director of the group’s Financial Institutions advisory business.
Given his background, we think his large stock purchase is notable.
Share Price Weakness
Global Payments’ share price took a hit in early November after the company provided full-year revenue guidance that was below estimates, due to the strong US dollar and its exit from Russia.
However, the guidance wasn’t terrible. For the full year, the company expects constant currency adjusted net revenue growth of 10% to 11% year on year, along with adjusted earnings per share growth of between 17% to 20% over 2021. Additionally, it now expects adjusted operating margin expansion of up to 170 basis points, an increase from its previous guidance of up to 150 basis points.
It’s worth noting that after the recent share price fall, the stock’s valuation is quite low. Taking the mid-point of the adjusted earnings guidance ($9.64), the forward-looking P/E ratio is currently under 10.
In light of this low valuation, we see the insider buying here as a bullish indicator.