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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 we'll take a look at whether insiders have been buying or selling shares in Shenandoah Telecommunications Company (NASDAQ:SHEN).
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 equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
The Last 12 Months Of Insider Transactions At Shenandoah Telecommunications
Over the last year, we can see that the biggest insider sale was by the Senior Vice President of Sales & Marketing, William Pirtle, for US$929k worth of shares, at about US$46.43 per share. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$38.05. So it may not tell us anything about how insiders feel about the current share price.
Over the last year we saw more insider selling of Shenandoah Telecommunications shares, than buying. 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 like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Shenandoah Telecommunications
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Shenandoah Telecommunications insiders own 5.8% of the company, worth about US$109m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Shenandoah Telecommunications Insiders?
It doesn't really mean much that no insider has traded Shenandoah Telecommunications shares in the last quarter. It's great to see high levels of insider ownership, but looking back at the last year, we don't gain confidence from the Shenandoah Telecommunications insiders selling. Of course, the future is what matters most. So if you are interested in Shenandoah Telecommunications, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.