Why VeriFone Systems Inc (PAY) Is Falling Despite Record Quarterly Revenues

Another useful tool for guaging a company’s future prospects is the insider trading surrounding it, as insiders have a better idea about the company’s prospects than anyone else. We should note that insider sales are a much weaker signal than insider purchases, since they can occur due to a much wider variety of reasons than the insider being bearish on their company. While there have been no insider purchases of VeriFone Systems Inc (NYSE:PAY) shares so far this year, prominent insider sales include that by Alok Bhanot, the company’s Chief Technology Officer and Executive Vice President, who has disposed of some 11,900 shares this year, and Executive Vice President Aruna Sunil Kappagoda, who sold 52,900 shares in April.

VeriFone Systems Inc (NYSE:PAY) has considerable growth prospects in the future, as the company continues to expand its business not just in North America, but across the globe, including Europe and Asia. Moreover, its product portfolio is also growing. Most importantly, VeriFone Systems Inc (NYSE:PAY)’s guidance for the fiscal year 2015 remains consistent at $1.997 to $2 billion in revenues, which would mark about a 7% growth from last year. Therefore we consider the current dip to be a good chance to buy the stock. Additionally, the company’s current valuation is still relatively cheap, with a forward earnings multiple of just 13.81.

Disclosure: None