Possible Bearish Signals With TELUS Insiders Disposing Stock

The fact that multiple TELUS Corporation (TSE:T) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for TELUS

TELUS Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Executive VP and Chief Legal & Governance Officer, Andrea Wood, sold CA$2.0m worth of shares at a price of CA$22.05 per share. That means that even when the share price was below the current price of CA$23.03, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 100% of Andrea Wood's holding.

Over the last year, we can see that insiders have bought 33.76k shares worth CA$775k. But insiders sold 98.22k shares worth CA$2.2m. All up, insiders sold more shares in TELUS than they bought, 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: Most of them are flying under the radar).

TELUS Insiders Bought Stock Recently

We saw some TELUS insider buying shares in the last three months. In total, insiders bought CA$259k worth of shares in that time. But insider Mario Mele sold CA$208k worth. It is nice to see that insiders have bought, but the quantum isn't large enough to get us excited.

Does TELUS Boast High Insider Ownership?

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. TELUS insiders own about CA$36m worth of shares. That equates to 0.1% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About TELUS Insiders?

The recent insider purchases are heartening. On the other hand the transaction history, over the last year, isn't so positive. The more recent transactions are a positive, but TELUS insiders haven't shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. In short they are likely aligned with shareholders. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 5 warning signs for TELUS (of which 2 are concerning!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 of direct interests only, but not derivative transactions or indirect interests.

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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.