Despite the recent decline of Shenandoah Telecommunications Company, insiders made a profit of around US$56,000 after buying earlier this year.

Shenandoah Telecommunications Company (NASDAQ:SHEN) Insiders who have acquired stocks in the past 12 months can probably afford to overlook the recent 4.9% drop in the stock price. The reason being that, despite the recent loss, the initial insider purchase value of US$462,000 is now worth US$517,000.

While we don’t think shareholders should simply follow insider trading, we think it makes perfect sense to keep tabs on what insiders are doing.

If you are not interested in researching SHEN’s insider trading, we have a free list of interesting investment ideas to potentially inspire your next investment!

Shenandoah Telecommunications insider trades over the past year

Chairman Christopher French has made the biggest insider buy in the past 12 months. This single transaction was for US$250,000 of shares at a price of US$21.45 each. So clearly an insider wanted to buy, roughly at the current price, which is US$22.94. Of course, they may have changed their minds. But it does suggest they are optimistic. While we always like to see insider buys, it makes less sense if the buys were made at much lower prices, as the opportunity they saw may have passed. In this case, we are happy to report that insider buying was done at prices close to current prices.

Over the past twelve months, Shenandoah Telecommunications insiders were buying stock, but not selling. You can see insider trading (by companies and individuals) over the past year illustrated in the table below. By clicking on the graph below, you will be able to see the precise detail of each insider trade!

NasdaqGS: SHEN Insider Trading Volume August 24, 2022

There are many other companies whose insiders buy shares. You probably do not want to miss this free list of growing companies insiders are buying.

Shenandoah Telecom Insiders Recently Bought Stock

It’s good to see that Shenandoah Telecommunications insiders have made notable investments in the company’s stock. President Christopher French spent US$250,000 on stocks and there were no sales. This could be interpreted as suggesting a positive outlook.

Does Shenandoah Telecommunications boast high insider ownership?

Another way to test alignment between a company’s executives and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely insiders will be incentivized to build the company for the long term. Insiders own 4.2% of Shenandoah Telecommunications stock, worth approximately $48 million. While this is a high but not exceptional level of insider ownership, it suffices to indicate some alignment between management and small shareholders.

So what do Shenandoah Telecommunications insider trading indicate?

The recent insider buying is encouraging. We also rely on the longer-term picture of insider trading. However, we note that the company has not made a profit in the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest that Shenandoah Telecommunications insiders are well aligned and may believe the stock price is too low. If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily you can check this free report showing analysts’ predictions for its future.

But note: Shenandoah Telecommunications may not be the best stock to buy. So take a look at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Calculation of discounted cash flows for each share

Simply Wall St performs a detailed calculation of discounted cash flow every 6 hours for every stock in the market, so if you want to find the intrinsic value of any company, just search here. It’s free.

Sean B. Jackson