A VeriFone Systems Inc (PAY) Insider’s Trust Bought About 28,000 Shares

The closest peer for Verifone is NCR Corporation (NYSE:NCR), whose products include point of sale terminals (the company was formerly known as National Cash Register) which are complementary to VeriFone Systems Inc (NYSE:PAY)’s own payment systems. While NCR’s net income has been at a fairly low level on a trailing basis, the company experienced 22% earnings growth in its last quarterly report compared to the first quarter of 2012, supported by 13% revenue growth. The stock trades at 11 times forward earnings estimates as the sell-side expects these improvements to continue next year. We can also compare Verifone to eBay Inc (NASDAQ:EBAY), whose Paypal business unit is one of the many players trying to revolutionize mobile payments in a way that some have seen as a threat to Verifone’s business. eBay has also been seeing double-digit growth rates on both top and bottom lines. While the trailing and forward P/Es of 28 and 18 respectively suggest that the market has already accounted for a good deal of future earnings growth, it might be worth looking into as a potential “growth at a reasonable price” stock.

On a forward earnings basis VeriFone Systems Inc (NYSE:PAY) does look appealing, and of course we have multiple insiders buying the stock. However, we don’t feel comfortable in speculating that business conditions will improve this much- revenue has been down considerably, and the company does not seem to have been cutting costs enough to tread water on the profitability front. As a result we would at least want to wait for more financials from the company and would likely not be recommending it in value terms even then.

Disclosure: I own no shares of any stocks mentioned in this article.