Although Telecom Plus Plc (LON:TEP) is down 6.2% over the past week, insiders who sold £30m worth of shares over the past year have been less fortunate. Given that the average selling price of £14.50 is still below the current share price, insiders would probably have been better off sticking with their shares.
While we don’t believe that shareholders should simply track insider transactions, we would think it foolish to ignore insider transactions entirely.
Before we look at these insider transactions, you might want to know that our analysis points to them TEP is potentially overrated!
Telecom Plus insider transactions over the past year
In the last 12 months, the largest single sale by an insider was the sale of £29m of shares at £14.50 per share by Non-Executive Chairman Charles Wigoder. So it’s clear that an insider wanted to take some money off the table, even below the current price of £19.94. We generally view it negatively when insiders have sold, particularly if they have sold below the current price, as this implies that they believed a lower price was appropriate. While insider selling is sometimes discouraging, it’s a weak signal. We note that the largest single sale accounted for only 21% of Charles Wigoder’s holding.
Overall, Telecom Plus insiders sold more than they bought last year. Below is a visual representation of insider transactions (both corporate and individual) over the past 12 months. If you want to know exactly who sold how much and when, just click on the graphic below!
For those who like to find win investments This free List of growing companies with recent insider purchases might be just the ticket.
Many investors like to check how much of a company is owned by insiders. Typically, the higher the insider ownership, the more likely it is that insiders will be incentivized to build the company over the long term. It’s great to see that Telecom Plus insiders own 12% of the company, valued at around £185m. I like to see this level of insider ownership because it increases the likelihood that management has the best interests of shareholders in mind.
What could the insider transactions at Telecom Plus tell us?
It doesn’t really mean much that no insiders traded Telecom Plus stock last quarter. It’s great to see a high level of insider ownership, but looking back over the past year, we don’t gain confidence from Telecom Plus Insider sales. So these insider transactions can help us build a thesis about the stock, but it’s also worth understanding the risks this company faces. You would be interested in what we found 1 Telecom Plus warning sign and we encourage you to take a look.
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For the purposes of this article, insiders are individuals who report their transactions to the relevant regulator. We currently account for open market transactions and private dispositions, but not derivatives transactions.
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This Simply Wall St article is of a general nature. We provide comments based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
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