Need To Know: United States Cellular Corporation (NYSE:USM) Insiders Have Been Selling Shares
We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in United States Cellular Corporation (NYSE:USM).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Check out our latest analysis for United States Cellular
United States Cellular Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Executive VP and CTO of Engineering & Information Services Michael Irizarry sold US$1.5m worth of shares at a price of US$40.58 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$46.68. Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. When an insider sells below the current price, it does tend to make us wonder about the current valuation. We note that the biggest single sale was 100% of Michael Irizarry’s holding.
In total, United States Cellular insiders sold more than they bought over the last year. They sold for an average price of about US$43.97. It’s not too encouraging to see that insiders have sold at below the current price. But we wouldn’t put too much weight on the insider selling. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of United States Cellular
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that United States Cellular insiders own 0.3% of the company, worth about US$10m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At United States Cellular Tell Us?
It doesn’t really mean much that no insider has traded United States Cellular shares in the last quarter. Our analysis of United States Cellular insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for United States Cellular.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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