Liberty Broadband Insiders Sell US$2.9m Of Stock, Possibly Signalling Caution

In the last year, many Liberty Broadband Corporation (NASDAQ:LBRD.K) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Liberty Broadband

Liberty Broadband Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Director, J. Wargo, sold US$1.3m worth of shares at a price of US$52.18 per share. That means that even when the share price was below the current price of US$78.34, an insider wanted to cash in some shares. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 25% of J. Wargo's stake.

Insiders in Liberty Broadband didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Liberty Broadband Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Liberty Broadband shares. In total, insiders sold US$506k 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

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Liberty Broadband insiders own 9.0% of the company, currently worth about US$998m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Liberty Broadband Tell Us?

Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Liberty Broadband is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Liberty Broadband.

But note: Liberty Broadband 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 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.