Frank Yeary, a director at PayPal Holdings (PYPL), recently bought 4,000 shares. The buy increased his holdings by nearly 15 percent, and came to a total price of just under $500,000.
The buy came a day after the company President and CEO also bought shares, buying 7,994 shares at a cost of just under $996,000. Insiders have generally been sellers of shares at the company over the past three years, as is typical of big tech firms, but this adds to recent buying by insiders.
Overall, insiders own just over 0.1 percent of company shares.
Shares of the payments platform have shed nearly 60 percent in the past year, as earnings growth has dropped. However, even with that drop in growth, revenue is up 13 percent over the past year and the company has dropped to under 30 times earnings.
Action to take: PayPal is a leading player in the payments space, and that lead is likely to hold.
The drop in shares form the peak looks like a long-term buying opportunity, which may explain why insiders are buying shares for the first time in years. However, buyers of shares won’t get a dividend anytime soon.
For traders, the insider buying suggests a potential move higher in the coming months. The May $150 calls, last going for about $2.85, are an inexpensive way to play a share rally from here in the months ahead.
The option is inexpensive enough to potentially yield triple-digit returns in the next few months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.