May 13, 2026 · all posts

Evertec's COO, EVP, and General Counsel bought $1.36 million combined within four trading days, with the same three executives having sold approximately $1.8 million at $34–37 over the prior twelve months — a coordinated reversal from net seller to net buyer at a 35% lower price.

EVTC · Evertec, Inc.

Shares

130

Entry

$23.09

Stop

$18.47

Cost

$3,001.70

% of book

3.1%

Status

open

Evertec reported Q1 2026 in late April. The stock had been compressing for six months from a 52-week high of $38.56 to the low-$20s on a combination of weak quarterly comps and Puerto Rico macro concerns. Between May 7 and May 12, four insiders — three of them operating officers — bought a combined $1.82M of stock on the open market. Three of those four had been net sellers of the same stock at $34–37 over the prior twelve months. The same individuals selling at higher prices and buying at lower prices, within the same calendar year, is one of the cleanest reversal patterns the literature catalogues. I bought 130 shares at $23.09.

How it came across the radar

Four Form 4 P-codes between May 7 and May 12:

• 2026-05-07 — Luis Rodriguez-Gonzalez (GC, EVP) — 17,000 shares at $24.10, $409,775.
• 2026-05-08 — Joaquin Castrillo-Salgado (Senior EVP, COO) — 20,000 shares at $22.74, $454,706.
• 2026-05-08 — Frank D’Angelo (Director) — 20,000 shares at $23.40, $468,000.
• 2026-05-11 — Miguel Vizcarrondo (EVP) — 21,000 shares at $23.37, $490,772.

Total cluster: $1.82M across four reporting persons, three of whom are operating officers (COO, EVP, GC). The CEO is not in the cluster, which is a structural mark-down on the signal quality.

The reversal pattern is the more interesting dimension. Looking at the same individuals’ prior twelve months:

• Vizcarrondo sold $1.46M at $36.44 in May 2025; bought $491k at $23.37 in May 2026. Round-trip discount: 36%.
• Rodriguez-Gonzalez sold $674k at $35.69 in May 2025; bought $410k at $24.10 in May 2026. Round-trip discount: 32%.
• Castrillo-Salgado sold $1.75M at $36.08 in December 2024 as CFO (now COO); bought $455k at $22.74 in May 2026. Round-trip discount: 37%.

Three operating officers sold at prices in the $34–37 range during 2024–25 and have now bought back approximately one-quarter of what they sold, at a 32–37% lower price, within a four-trading-day window. The economic interpretation is that the three of them have updated their view on intrinsic value: either the prior selling was tax-driven or share-count management rather than valuation-driven, or the company’s outlook has improved since they sold. The pattern is unusual enough that the second interpretation is the more parsimonious one.

The four Form 4 filings show P transaction codes and the 10b5-1 cover-sheet checkbox is unchecked on all four (verified in the SEC XML). These are discretionary open-market purchases.

What the business does

Evertec is the largest electronic payment processor in Latin America and the Caribbean, with its core business concentrated in Puerto Rico. The company operates a closed-loop payment network (ATH) that handles a substantial fraction of all consumer payment transactions on the island — ATM, debit, credit, account-to-account transfers, and bill payment — plus card processing for issuers and acquirers across Mexico, the Dominican Republic, Costa Rica, and a long tail of smaller Caribbean and Central American markets.

~$700M annual revenue, ~28% adjusted EBITDA margin, 60% Puerto Rico exposure. The business is structurally sticky: switching costs are high for the banks and merchants that depend on ATH for daily settlement, and the network effects on the consumer side (the ATH Móvil app has approximately 2M users on an island of 3.2M) create a moat that competitors would need a decade to overcome.

The growth story is geographic diversification away from Puerto Rico. The company has been acquiring payment-processing businesses in Mexico (the Sinqia transaction), Brazil, and across Latin America. The thesis is that Puerto Rico is a slow-growing but cash-generative base, and the Mexican and Brazilian businesses can compound at 15-20% as fintech penetration in those markets continues.

The argument for

Forward P/E is 5.6. Trailing P/E is 11.5. Both are absolute outliers in payment processing — Fiserv, Global Payments, and FIS trade at 10-15× forward. Mastercard and Visa trade at 25-30× forward. Evertec at 5.6× implies the market is pricing the business as if Puerto Rico is in terminal decline and the Latin American expansion isn’t earning a positive return on capital.

Three officers buying $1.36M combined into that valuation while having been net sellers above $34 the year before is the signal. The cleanest interpretation is that the operating team can see something in the order book or pipeline that the public quarterly disclosures haven’t yet reflected — either Mexico/LatAm geography is inflecting, or Puerto Rico stabilized after the late-2025 weakness, or both. Officers who sold at $36 are unlikely to buy at $23 unless their internal forward earnings forecast has improved materially.

The Puerto Rico fundamentals are quietly improving. Federal hurricane reconstruction funds (CDBG-DR, Section 17 Medicaid, Stafford Act disaster relief) totaling approximately $80B remain in active deployment. The island’s GDP has grown for eight consecutive quarters. Unemployment is at a multi-decade low. The fiscal stress that drove the bankruptcy era has not resolved completely, but the trajectory is positive for a consumption-driven payment processor.

The dividend yield is 0.83% (low, but the company is using free cash flow for buybacks and the Sinqia integration). Share count has declined approximately 7% over the last three years through programmatic repurchases at higher prices than the current $23.

The strongest case against

The CEO is not in the cluster. Morgan Schuessler (Pres, CEO) sold $3.0M at $37.45 in March 2025 and has not bought since. He is the most senior decision-maker on the company’s trajectory and his decision to not participate in the May reversal is informative. Three officers without their CEO is a weaker signal than three officers with their CEO; the asymmetric inference is that Schuessler may know something — about Q2 demand or LatAm integration timing — that the others either don’t know or are choosing to discount.

Puerto Rico’s macro recovery is genuinely fragile. Federal disaster funds will eventually end. The island’s population continues to shrink at approximately 1% annually. Outmigration to the U.S. mainland is the biggest secular headwind for consumer-payment volume — every Puerto Rican who moves to Florida is a customer Evertec keeps via cross-border remittance but loses on local card volume.

The Latin American integration story is unproven. Sinqia (Brazil) was acquired in 2023 for approximately $625M; the integration has been bumpy and the segment has produced modest organic growth post-deal. Mexico is more competitive than the local Puerto Rico monopoly position — Visa and Mastercard direct competition is real, plus local fintech alternatives (Mercado Pago, Clip) are scaling.

The 5.6× forward multiple is partially deserved. The terminal value question — does Puerto Rico’s consumer payment volume keep compounding, or does it gradually erode with population — is a real unknown. A reasonable bear case is that EVTC is worth 7-8× forward EPS in a stable steady state, and the current 5.6× reflects roughly $1.50 of fair-value upside rather than $10.

Evertec’s leverage is moderately high (~3.0× net debt/EBITDA pro forma for Sinqia). A LatAm recession would compress EBITDA into the leverage and the equity becomes more volatile than the operating result.

Where I am on it

3.06% of book — full-size relative to the 2-4% standard. The cluster signal is strong on the reversal pattern but the CEO non-participation knocks it back from the maximum end of the range. Stop at $18.47, -20% from $23.09 fill, GTC, expires 2026-08-11. The stop sits below the 52-week low of $21.81 and below any reasonable support level. A break to $18 would mean either Puerto Rico macro re-deteriorated or the LatAm integration is in worse shape than the May cluster suggested.

Compared to other positions: thesis shape is closest to LW (broad officer cluster after market dislocation), but EVTC has the additional reversal-pattern signal that LW didn’t have. Position size is comparable to MMSI today and slightly larger than HUBS, reflecting the cheaper valuation entry point.

What would change my mind

• Q2 print (late July) with weak Mexico/Brazil performance and no LatAm uptick. The bull case requires the geographic diversification to start showing in operating results. Two consecutive quarters of flat LatAm growth would invalidate the integration thesis.
• CEO Schuessler filing additional sales in the next 60 days. He has been a consistent seller; resumption of the pattern after this cluster would say the operating-officer purchases were idiosyncratic rather than reflective of a corporate-wide view.
• Puerto Rico GDP turning negative in any single quarter. The cluster works on the assumption that the macro base is stable; a negative print would put the trade thesis under direct pressure.
• A 424B5 takedown or any equity raise from Evertec. Current shelf is clean. Leverage is moderate but a raise would suggest the LatAm acquisitions are not generating expected cash.
• A break below $21.81 (the 52-week low) on volume. Stop is below this level; a clean break of the low without a bounce would say the cluster signal failed.

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