One of the most bullish signals in insider transaction analysis is ‘cluster buying.’ This is where multiple insiders are buying company stock simultaneously.
In this report, we are going to highlight some cluster buying at Global Payments Inc (GPN). Global Payments is a leading payments technology company that provides software and services to customers all over the world. 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 capitalization of $49.9 billion.
Global Payments Inc: Insider Buying
Our insider transaction data shows that between 5 August and 10 August, three insiders at Global Payments bought stock. The transactions are listed below:
- 5 August: CEO Jeff Sloan purchased 2,946 shares at a price of $169.87 per share
- 5 August: Director Joia Johnson purchased 590 shares at a price of $170.40 per share
- 10 August: Director Connie McDaniel purchased 1,150 shares at a price of $173.48 per share
Combined, these three insiders spent around $800,000 on GPN stock.
Bullish Cluster Buying
There are a couple of things that stand out about this cluster buying activity. Firstly, the purchases are large. Our records show that this buying activity represents the largest amount of insider buying at Global Payments within a quarter for several years. This suggests that those buying see a lot of value on offer at present.
Secondly, the cluster purchase contains a buy from the CEO. CEOs tend to have a deep level of insight into their companies’ operations and are usually way ahead of analysts when it comes to business trends.
It’s worth noting that Global Payments’ CEO, Jeff Sloan, has over 25 years of experience in the financial technology industry. Before joining Global Payments as President in 2010, he was a partner and worldwide head of the Financial Technology Group in New York for Goldman Sachs.
2021 Outlook Raised
Global Payments recently posted a strong set of second-quarter results. For the quarter, adjusted net revenues increased 28% to $1.94 billion, while adjusted earnings per share increased 56% to $2.04. The group’s adjusted operating margin of 41.8% expanded 480 basis points.
“Our business accelerated meaningfully in the second quarter of 2021, demonstrating significant ongoing momentum," commented Mr. Sloan.
On the back of these results, the group raised its expectations for the full year 2021. It now expects adjusted net revenue to be in the range of $7.70 billion to $7.73 billion, reflecting growth of 14% to 15%, and adjusted earnings per share to be in a range of $8.07 to $8.20, representing growth of 26% to 28% over 2020. It also increased its share repurchase program by $1.5 billion.
“We remain encouraged by the trends we are seeing in our business and are again raising our expectations for the full year 2021,” said CFO Paul Todd.
In light of these results and the increase in guidance, we see the cluster buying here as a bullish indicator.