Chad Richison, Co-CEO, President, and Chairman of Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC), has recently sold a significant amount of company stock, according to the latest filings with the Securities and Exchange Commission. The transactions, which took place on May 28, 2024, involved the sale of Paycom shares with a total value exceeding $650,000.
The executive sold Paycom shares at prices ranging from $167.35 to $169.95, reflecting a varied market price on the day of the sale. While the exact number of shares sold at each price point within this range was not disclosed, the total sum of the sales was calculated to be approximately $657,177.
Richison's transactions were executed under a pre-arranged trading plan, known as a 10b5-1 plan, which allows company insiders to sell stocks at predetermined times to avoid accusations of insider trading. This plan was adopted jointly by Richison and Ernest Group, Inc. on February 16, 2024.
Following the reported transactions, Richison still retains a significant number of Paycom shares. The SEC filing indicates that the sales were part of a series of transactions that involved both direct and indirect holdings. Some of the indirect holdings are associated with Ernest Group, Inc., a company where Richison is the sole director and which is owned by Richison and certain trusts for his children.
The SEC filing also notes that Richison has agreed to voluntarily disgorge any profits from matchable transactions that occur within six months of a previously reported purchase, in compliance with Section 16(b) of the Securities Exchange Act of 1934.
Investors often monitor insider transactions as they can provide insights into executives' perspectives on the company's current valuation and future prospects. However, it is important to note that such sales do not always indicate a lack of confidence in the company and can be motivated by various personal financial planning reasons.
Paycom Software, Inc., headquartered in Oklahoma City, specializes in cloud-based human capital management software solutions and has been a significant player in the prepackaged software industry.
InvestingPro Insights
Amidst the recent insider stock sales by Chad Richison, Co-CEO, President, and Chairman of Paycom Software, Inc. (NYSE:PAYC), investors may find it beneficial to consider the current financial metrics and analyst insights provided by InvestingPro. Paycom, a leader in cloud-based human capital management software, has a market capitalization of approximately $9.25 billion, reflecting its significant presence in the industry. The company's Price to Earnings (P/E) ratio stands at 20.13, with a slight adjustment to 19.74 when considering the last twelve months as of Q1 2024. This P/E ratio, when juxtaposed with the company's near-term earnings growth, indicates that Paycom is trading at a low multiple relative to its earnings expansion.
Furthermore, Paycom boasts an impressive gross profit margin of 86.55% over the last twelve months as of Q1 2024, underscoring the company's ability to maintain a high level of profitability in its operations. This financial health is complemented by an InvestingPro Tip that highlights the company's strong cash position, which exceeds its debt, providing a solid foundation for future growth and stability.
However, it's worth noting that Paycom's stock has experienced a decline over the past month, with a 1-month price total return of -13.48%. This downward trend aligns with another InvestingPro Tip that suggests the stock is currently in oversold territory, according to the Relative Strength Index (RSI). Such a technical indicator may imply a potential rebound opportunity for investors who are attentive to market timing.
For those seeking a deeper analysis, InvestingPro offers additional insights on Paycom, including a total of 11 InvestingPro Tips that can further inform investment decisions. To explore these tips and more detailed metrics, investors can visit https://www.investing.com/pro/PAYC. Moreover, by using the coupon code PRONEWS24, readers can obtain an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enhancing their investment research with valuable resources from InvestingPro.
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