Yahoo Finance Possible Bearish Signals With T-Mobile US Insiders Disposing Stock
In the last year, many T-Mobile US, Inc. (NASDAQ:TMUS) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for T-Mobile US
The Last 12 Months Of Insider Transactions At T-Mobile US
The Independent Director, Raul Claure, made the biggest insider sale in the last 12 months. That single transaction was for US$25m worth of shares at a price of US$130 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$141. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 2.7% of Raul Claure's holding.
T-Mobile US insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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).
T-Mobile US Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at T-Mobile US. In total, Independent Director Raul Claure sold US$25m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership Of T-Mobile US
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that T-Mobile US insiders own 0.7% of the company, worth about US$1.3b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About T-Mobile US Insiders?
An insider sold T-Mobile US shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But since T-Mobile US is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that T-Mobile US has 3 warning signs and it would be unwise to ignore these.
But note: T-Mobile US may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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