Paycom (NYSE:PAYC) Software, Inc. (NYSE:PAYC) Co-CEO, President, and Chairman Chad R. Richison has sold a portion of his company stock, according to a recent filing with the Securities and Exchange Commission. The transactions, which took place on May 22, 2024, resulted in a total sale of $701,028 worth of shares.
Richison executed multiple sales at varying prices, with the price per share ranging from $178.82 to $180.36. The sales represent a divestment from Richison's holdings in the company, although he continues to maintain a significant stake in Paycom Software, Inc.
The detailed transactions were part of a pre-arranged trading plan, known as a 10b5-1 plan, which allows company insiders to sell stocks at predetermined times to avoid any accusations of trading on non-public, material information. This plan was adopted jointly by Richison and Ernest Group, Inc. on February 16, 2024.
Following the sales, Richison's direct holdings in Paycom Software, Inc. have changed, but he remains a substantial shareholder through various trusts and entities. The Ernest Group, wholly owned by Richison and certain trusts for his children, holds a significant number of shares, and Richison may be deemed to beneficially own these shares.
Additionally, the filing mentioned several trusts for the benefit of Richison's children and grandchildren, which also hold shares in the company. As the settlor and sole trustee of these trusts, Richison's beneficial ownership extends to these holdings as well.
Investors often monitor insider transactions for insights into executives' perspectives on the company's stock value. However, the SEC filing does not necessarily indicate a change in the company's prospects or management's view of its future performance.
Paycom Software, Inc., headquartered in Oklahoma City, specializes in providing comprehensive, cloud-based human capital management software to help businesses manage the complete employment life cycle from recruitment to retirement.
InvestingPro Insights
Paycom Software, Inc. (NYSE:PAYC), a leader in cloud-based human capital management software, is currently navigating the financial markets with some compelling metrics and analyst perspectives. The company, which has recently seen its Co-CEO and President Chad R. Richison sell a portion of his stock, holds a market capitalization of approximately $9.87 billion, signaling strong investor confidence in its business model and market position.
From a financial standpoint, Paycom's gross profit margin is particularly notable, standing at an impressive 86.55% for the last twelve months as of Q1 2024. This figure showcases the company's efficiency in managing its cost of goods sold and its ability to retain a significant portion of its revenue as gross profit, which is a positive sign for potential investors.
An InvestingPro Tip points out that Paycom holds more cash than debt on its balance sheet, which is a reassuring signal for investors looking for financial stability in a company. This liquidity position could provide Paycom with the flexibility to invest in growth opportunities or weather economic downturns.
Another area of interest is the company's P/E ratio, which at 21.48, is considered low relative to its near-term earnings growth. This is a metric that value investors often look at to determine whether a stock is undervalued compared to its earnings potential. Additionally, Paycom's PEG ratio, which stands at 0.41, further emphasizes the company's potential for growth relative to its earnings.
It's also worth noting that Paycom is trading at a high Price / Book multiple of 6.89, reflecting investor expectations for future growth. While this may suggest a premium valuation, it aligns with the company's strong historical performance and future prospects.
For those interested in delving deeper into Paycom's financial health and future outlook, there are additional InvestingPro Tips available. For instance, analysts predict the company will be profitable this year and it has been profitable over the last twelve months. Furthermore, the company has enjoyed a high return over the last decade, which is a testament to its sustained success.
For readers looking to explore more insights and tips, InvestingPro offers a comprehensive analysis of Paycom's financials and market position. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to a wealth of data and expert analysis to inform their investment decisions. Currently, there are 8 additional InvestingPro Tips listed for Paycom, which could further guide investors in their evaluation of the company.
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