Some T-Mobile US, Inc. (NASDAQ:TMUS) shareholders may be a little concerned to see that the Independent Director, Raul Claure, recently sold a substantial US$25m worth of stock at a price of US$224 per share. However, that sale only accounted for 3.2% of their holding, so arguably it doesn't say much about their conviction.
T-Mobile US Insider Transactions Over The Last Year
Notably, that recent sale by Independent Director Raul Claure was not the only time they sold T-Mobile US shares this year. Earlier in the year, they fetched US$180 per share in a -US$547m sale. That means that even when the share price was below the current price of US$235, 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. 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. It is worth noting that this sale was only 44% of Raul Claure's holding.
T-Mobile US insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that T-Mobile US insiders own 0.4% of the company, worth about US$1.1b. 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 Do The T-Mobile US Insider Transactions Indicate?
Insiders 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. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 2 warning signs with T-Mobile US and understanding them should be part of your investment process.
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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.
