United States Cellular Board Member Makes $121K Stock Purchase

A new SEC filing reveals that Xavier Williams, Board Member at United States Cellular USM, made a notable insider purchase on May 22,.

What Happened: Williams demonstrated confidence in United States Cellular by purchasing 2,836 shares, as reported in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The total value of the transaction is $121,976.

As of Thursday morning, United States Cellular shares are down by 0.0%, currently priced at $43.68.

Delving into United States Cellular's Background

U.S. Cellular is a regional wireless carrier that serves about 4.5 million customers spread across four major geographic clusters: the Midwest, mid-Atlantic, New England, and the Pacific Northwest. These service territories encompass a total population of about 32 million people. The vast majority of the markets the firm serves are rural or second/third-tier cities, with only the greater Milwaukee and Oklahoma City regions boasting populations greater than 1 million. U.S. Cellular also owns a 5.5% stake in Verizon Wireless' Los Angeles operations and, unlike its wireless carrier peers, owns most of its own towers.

United States Cellular: Financial Performance Dissected

Revenue Challenges: United States Cellular's revenue growth over 3 months faced difficulties. As of 31 March, 2024, the company experienced a decline of approximately -3.65%. This indicates a decrease in top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Communication Services sector.

Interpreting Earnings Metrics:

• Gross Margin: The company shows a low gross margin of 58.11%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.

• Earnings per Share (EPS): With an EPS below industry norms, United States Cellular exhibits below-average bottom-line performance with a current EPS of 0.21.

Debt Management: United States Cellular's debt-to-equity ratio is below the industry average. With a ratio of 0.86, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Financial Valuation Breakdown:

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 64.24, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.99, which is lower than the industry average. This suggests a possible undervaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company's EV/EBITDA ratio 7.68 is above the industry average, suggesting that the market values the company more highly for each unit of EBITDA. This could be attributed to factors such as strong growth prospects or superior operational efficiency.

Market Capitalization Perspectives: The company's market capitalization falls below industry averages, signaling a relatively smaller size compared to peers. This positioning may be influenced by factors such as perceived growth potential or operational scale.

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Why Pay Attention to Insider Transactions

In the complex landscape of investment decisions, investors should approach insider transactions as part of a comprehensive analysis, considering various elements.

From a legal standpoint, the term "insider" pertains to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

A company insider's new purchase is a indicator of their positive anticipation for a rise in the stock.

While insider sells may not necessarily reflect a bearish view and can be motivated by various factors.

Navigating the World of Insider Transaction Codes

When dissecting transactions, the focal point for investors is often those occurring in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of United States Cellular's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.