United States Cellular: 3 Different Insiders Have Sold Shares This Month

May.12.14 | About: United States (USM)

Summary

3 insiders sold United States Cellular stock within one month.

The stock was not purchased by any insiders in the month of intensive selling.

All 3 of these insiders decreased their holdings by more than 10%.

United States Cellular Corporation (NYSE:USM) operates as a wireless telecommunications service provider in the United States.

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Insider selling during the last 30 days

Here is a table of United States Cellular's insider activity during the last 30 days.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Steven Campbell CFO May 9 3,570 No 406 shares 89.8%
Michael Irizarry CTO May 6-7 10,571 No 1 share + 59,769 options 15.0%
Harry Harczak Director May 5 1,200 No 7,520 shares 13.8%
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There have been 15,341 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of United States Cellular's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
May 2014 15,341 0
April 2014 1,274 0
March 2014 0 0
February 2014 0 0
January 2014 0 0
December 2013 0 0
November 2013 1,200 0
October 2013 0 0
September 2013 0 0
August 2013 46,394 0
July 2013 0 0
June 2013 0 0
May 2013 0 0
April 2013 1,100 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
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There have been 65,309 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

United States Cellular reported the first-quarter financial results on May 2 with the following highlights:

Revenue $925.8 million
Net income $19.5 million
Cash $438.6 million
Debt $878.1 million
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The three insiders sold their shares after these results.

United States Cellular has declining revenues currently.

Outlook

United States Cellular expects capital expenditures for 2014 to be approximately $640 million.

Competition

United States Cellular's competitors include Sprint Corporation (NYSE:S). Here is a table comparing these two companies.

Company USM S
Market Cap: 3.50B 34.79B
Employees: 6,700 25,000
Qtrly Rev Growth (yoy): -0.14 0.01
Revenue: 3.76B 35.58B
Gross Margin: 0.53 0.44
EBITDA: 354.50M 5.68B
Operating Margin: -0.07 0.01
Net Income: 154.61M -2.52B
EPS: 1.82 -0.73
P/E: 22.87 N/A
PEG (5 yr expected): -14.29 N/A
P/S: 0.94 0.97
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United States Cellular is trading at a similar P/S ratio to Sprint. In Sprint, there have been 474,806 shares sold, and there have been zero shares purchased by insiders this year. Only United States Cellular has seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling United States Cellular, and there have not been any insiders buying United States Cellular during the last 30 days. All three of these insiders decreased their holdings by more than 10%. United States Cellular has an insider ownership of 74.88%.

United States Cellular has a $31 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $31 price target. I would place a stop loss at $49, which is the five-year high. The two main reasons for the proposed short entry are a bearish Point & Figure chart, and the intensive insider-selling activity.

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Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in USM over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.