Stock Analysis

United States Cellular Corporation (NYSE:USM) insiders who sold US$671k worth of stock earlier this year are probably glad they did so as market cap slides to US$1.8b

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NYSE:USM
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Over the past year, insiders sold US$671k worth of United States Cellular Corporation (NYSE:USM) stock at an average price of US$30.35 per share allowing them to get the most out of their money. The company’s market cap plunged by US$66m after price dropped by 3.5% last week but insiders were able to limit their loss to an extent.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Our analysis indicates that USM is potentially undervalued!

United States Cellular Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive VP, Deirdre Drake, for US$262k worth of shares, at about US$30.55 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$21.42. So it may not tell us anything about how insiders feel about the current share price.

In the last year United States Cellular insiders didn't buy any company stock. 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!

insider-trading-volume
NYSE:USM Insider Trading Volume November 27th 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does United States Cellular Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that United States Cellular insiders own 1.0% of the company, worth about US$18m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About United States Cellular Insiders?

It doesn't really mean much that no insider has traded United States Cellular shares in the last quarter. Our analysis of United States Cellular insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of 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. When we did our research, we found 2 warning signs for United States Cellular (1 shouldn't be ignored!) that we believe deserve your full attention.

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, but not derivative transactions.

What are the risks and opportunities for United States Cellular?

United States Cellular Corporation provides wireless telecommunications services in the United States.

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Rewards

  • Trading at 97.2% below our estimate of its fair value

  • Earnings are forecast to grow 39.72% per year

Risks

  • Interest payments are not well covered by earnings

  • Profit margins (2%) are lower than last year (3.2%)

View all Risks and Rewards

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Further research on
United States Cellular

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