EVP Of United States Cellular Makes $1.86M Sale

Disclosed on August 7, Kevin Lowell, EVP at United States Cellular USM, executed a substantial insider sell as per the latest SEC filing.

What Happened: Lowell's recent Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday unveiled the sale of 37,597 shares of United States Cellular. The total transaction value is $1,855,035.

United States Cellular shares are trading down 0.0% at $52.19 at the time of this writing on Thursday morning.

Unveiling the Story Behind United States Cellular

us 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. us 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. The firm has agreed to sell its wireless operations and 30% of its wireless spectrum licenses to T-Mobile, a transaction that it expects to close in mid-2025.

Key Indicators: United States Cellular's Financial Health

Negative Revenue Trend: Examining United States Cellular's financials over 3 months reveals challenges. As of 30 June, 2024, the company experienced a decline of approximately -3.13% in revenue growth, reflecting a decrease in top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Communication Services sector.

Profitability Metrics: Unlocking Value

• Gross Margin: With a low gross margin of 57.82%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency compared to its industry peers.

• Earnings per Share (EPS): With an EPS below industry norms, United States Cellular exhibits below-average bottom-line performance with a current EPS of 0.2.

Debt Management: With a below-average debt-to-equity ratio of 0.83, United States Cellular adopts a prudent financial strategy, indicating a balanced approach to debt management.

Valuation Analysis:

• Price to Earnings (P/E) Ratio: United States Cellular's stock is currently priced at a premium level, as reflected in the higher-than-average P/E ratio of 62.88.

• Price to Sales (P/S) Ratio: The P/S ratio of 1.2 is lower than the industry average, implying a discounted valuation for United States Cellular's stock in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): At 8.25, the company's EV/EBITDA ratio outperforms industry norms, reflecting positive market perception. This positioning indicates optimistic expectations for the company's future performance.

Market Capitalization: Indicating a reduced size compared to industry averages, the company's market capitalization poses unique challenges.

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Why Insider Activity Matters in Finance

It's important to note that insider transactions alone should not dictate investment decisions, but they can provide valuable insights.

Within the legal framework, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as per Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are mandated to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.

However, insider sells may not always signal a bearish view and can be influenced by various factors.

Essential Transaction Codes Unveiled

When it comes to transactions, investors tend to focus on those in the open market, detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S indicates a sale. Transaction code C signals 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.