Executive VP & General Counsel Mark Nelson Sold A Bunch Of Shares In T-Mobile US

We wouldn't blame T-Mobile US, Inc. (NASDAQ:TMUS) shareholders if they were a little worried about the fact that Mark Nelson, the Executive VP & General Counsel recently netted about US$3.9m selling shares at an average price of US$263. That diminished their holding by a very significant 57%, which arguably implies a strong desire to reallocate capital.

View 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$547m worth of shares at a price of US$180 each. That means that even when the share price was below the current price of US$265, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 44% of Raul Claure's holding.

Over the last year we saw more insider selling of T-Mobile US shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Does T-Mobile US Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It's great to see that T-Mobile US insiders own 0.4% of the company, worth about US$1.2b. 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 Do The T-Mobile US Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at T-Mobile US, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that T-Mobile US is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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 2 warning signs for T-Mobile US you should know about.

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 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.