Traders Buy Shares of Alliance Data Systems (ADS) on Weakness After Insider Selling

Traders bought shares of Alliance Data Systems Co. (NYSE:ADS) on weakness during trading hours on Monday following insider selling activity. $56.03 million flowed into the stock on the tick-up and $40.94 million flowed out of the stock on the tick-down, for a money net flow of $15.09 million into the stock. Of all equities tracked, Alliance Data Systems had the 33rd highest net in-flow for the day. Alliance Data Systems traded down ($1.31) for the day and closed at $199.05Specifically, Director Holdings L.P. Valueact sold 125,000 shares of the company’s stock in a transaction on Wednesday, November 28th. The shares were sold at an average price of $199.10, for a total value of $24,887,500.00. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this link. Also, insider Valueact Capital Master Fund, sold 200,000 shares of the company’s stock in a transaction on Thursday, November 29th. The stock was sold at an average price of $198.60, for a total transaction of $39,720,000.00. The disclosure for this sale can be found here. Over the last 90 days, insiders have sold 1,000,000 shares of company stock worth $199,607,500. 2.60% of the stock is currently owned by corporate insiders.

A number of equities research analysts recently issued reports on the stock. Deutsche Bank set a $253.00 price objective on shares of Alliance Data Systems and gave the stock a “buy” rating in a report on Thursday, September 20th. Stephens cut shares of Alliance Data Systems from an “overweight” rating to an “equal” rating and set a $288.00 price objective for the company. in a report on Monday, September 17th. They noted that the move was a valuation call. Bank of America assumed coverage on shares of Alliance Data Systems in a report on Monday, September 17th. They issued a “buy” rating and a $290.00 price objective for the company. Oppenheimer reiterated a “hold” rating on shares of Alliance Data Systems in a report on Friday, October 5th. Finally, Zacks Investment Research cut shares of Alliance Data Systems from a “buy” rating to a “hold” rating in a report on Thursday, August 9th. Two equities research analysts have rated the stock with a sell rating, eight have assigned a hold rating and thirteen have assigned a buy rating to the company. The company has a consensus rating of “Hold” and a consensus target price of $254.25.

The stock has a market capitalization of $10.91 billion, a price-to-earnings ratio of 10.89, a price-to-earnings-growth ratio of 0.76 and a beta of 1.70. The company has a debt-to-equity ratio of 7.32, a quick ratio of 2.38 and a current ratio of 2.41.

Alliance Data Systems (NYSE:ADS) last released its earnings results on Thursday, October 18th. The business services provider reported $6.26 earnings per share for the quarter, topping the Zacks’ consensus estimate of $6.19 by $0.07. The firm had revenue of $2.02 billion during the quarter, compared to analyst estimates of $2.03 billion. Alliance Data Systems had a net margin of 12.11% and a return on equity of 56.33%. The business’s revenue was up 5.4% on a year-over-year basis. During the same quarter in the previous year, the business earned $5.35 EPS. As a group, equities research analysts anticipate that Alliance Data Systems Co. will post 21.53 earnings per share for the current year.

The company also recently announced a quarterly dividend, which will be paid on Wednesday, December 19th. Shareholders of record on Wednesday, November 14th will be given a dividend of $0.57 per share. This represents a $2.28 dividend on an annualized basis and a yield of 1.15%. The ex-dividend date is Tuesday, November 13th. Alliance Data Systems’s dividend payout ratio is 12.47%.

A number of institutional investors have recently added to or reduced their stakes in ADS. Davidson Investment Advisors raised its position in shares of Alliance Data Systems by 2.6% during the third quarter. Davidson Investment Advisors now owns 52,134 shares of the business services provider’s stock valued at $12,312,000 after buying an additional 1,329 shares during the last quarter. Engineers Gate Manager LP acquired a new position in shares of Alliance Data Systems during the third quarter valued at about $2,536,000. ValueAct Holdings L.P. raised its position in shares of Alliance Data Systems by 3.5% during the second quarter. ValueAct Holdings L.P. now owns 6,082,646 shares of the business services provider’s stock valued at $1,418,473,000 after buying an additional 205,246 shares during the last quarter. Cadence Capital Management LLC acquired a new position in shares of Alliance Data Systems during the third quarter valued at about $227,000. Finally, Nisa Investment Advisors LLC raised its position in shares of Alliance Data Systems by 3.6% during the third quarter. Nisa Investment Advisors LLC now owns 17,104 shares of the business services provider’s stock valued at $4,039,000 after buying an additional 600 shares during the last quarter. 91.70% of the stock is owned by hedge funds and other institutional investors.

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Alliance Data Systems Company Profile (NYSE:ADS)

Alliance Data Systems Corporation provides data-driven marketing and loyalty solutions worldwide. It operates through three segments: LoyaltyOne, Epsilon, and Card Services. The company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs.

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