Major Decision: John Gibbons Exercises Options and Earns $1.06 Million at Fiserv – Fiserv (NYSE:FI)

A large-scale exercise of the Company’s stock options by John GibbonsEVP at Fiserv France was disclosed in a new SEC filing on August 22 as part of an insider exercise.

What happened: A notable Form 4 filing with the U.S. Securities and Exchange Commission (SEC) on Thursday revealed that Gibbons, EVP at Fiserv, exercised stock options for 18,890 shares of FI, resulting in a transaction value of $1,056,328.

The update from Friday morning shows Fiserv Shares down 0.0%, current price $168.79. At this value, Gibbons’ 18,890 shares are worth $1,056,328.

Delve into the background of Fiserv

Fiserv is a leading provider of core processing and ancillary services such as electronic funds transfer, payment processing and loan processing to U.S. banks and credit unions, with a focus on small and mid-sized banks. Through its 2019 merger with First Data, Fiserv also offers payment processing services to merchants. About 10% of the company’s revenue is generated internationally.

Fiserv: Financial performance analyzed

Sales growth: Over the 3-month period, Fiserv showed positive performance and achieved a sales growth rate of 7.38% as of June 30, 2024. This reflects a significant increase in the company’s revenue. Compared to its industry peers, the company’s growth rate is lagging behind the average of its peers in the financial sector.

Explore profitability:

• Gross margin: The company has a high gross margin of 61.19%indicating strong cost management and higher profitability compared to its competitors.

• Earnings per share (EPS): Fiserv’s earnings per share exceed the industry average and indicate a strong earnings trend, with current earnings per share of 1.53.

Debt management: Fiserv’s debt ratio is below the industry average. With a ratio of 0.91The company is less dependent on external financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.

Valuation analysis:

• Price-earnings ratio (P/E): With a below-average P/E ratio of 29.35The stock has an attractive valuation and may offer a buying opportunity.

• Price-to-sales ratio (P/S): With a relatively high price-to-sales ratio of 5.11 Compared to the industry average, the stock could be considered overvalued due to its sales performance.

• EV/EBITDA analysis (enterprise value in relation to earnings before interest, taxes, depreciation and amortization): A high EV/EBITDA ratio of 14.24 reflects the market’s recognition of Fiserv’s value and positions the company as more highly valued relative to its industry peers.

Market capitalization analysis: The company’s market capitalization exceeds the industry average and indicates a dominant size compared to competitors, which suggests a strong market position.

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Investigating the importance of insider trading

The importance of a comprehensive approach is emphasized. While considering insider transactions is valuable, it is crucial to evaluate them in the context of other investment factors.

In a legal context, the term “insider” refers to any officer, director, or beneficial owner who owns more than ten percent of a company’s stock, as defined in Section 12 of the Securities Exchange Act of 1934. This includes senior management and major hedge funds. These insiders are required to report their transactions on a Form 4, which must be filed within two business days of the transaction.

A new purchase by a company insider is a sign of optimism and signals that he expects the stock to rise.

Although insider selling does not always indicate a pessimistic mood, it can be caused by various factors.

A deep dive into insider transaction codes

When investors delve into the details of stock transactions, they often focus their attention on those that occur in the open market, as set out in Table I of Form 4. P in Box 3 means a purchase, while S means a sale. Transaction code C signals the conversion of an option and the transaction code A means a grant, allocation or other acquisition of securities of the company.

See the full list of Fiserv insider trades.

This article was generated by Benzinga’s automated content engine and reviewed by an editor.