SHEN

Shenandoah Telecommunications ($SHEN) CEO Buys for 6 Straight Months, Major Shareholders Scoop Up $1.4M...Contrarian Buying Spree Despite 32% Stock Plunge

06/02/2025 20:48

Insiders at Shenandoah Telecommunications ($SHEN) are making aggressive purchases despite the stock's declining trend, drawing significant market attention. Energy Capital Partners III and ECP Fiber Holdings GP particularly caught investors' eyes with their substantial purchases totaling approximately $1.4 million over three days in late May. CEO Christopher E. French has demonstrated a consistent buying pattern from June 2024 through March 2025. Starting with consecutive purchases on June 10th and 14th, he bought 18,500 shares at an average price of $14.88 in August, investing approximately $275,000. In March 2025, he purchased another 16,500 shares at $12.01, maintaining steady buying across six separate transactions. This contrasts sharply with the stock's 32% decline from $18.63 in June 2024 to $12.58 in May 2025. Other key executives including CFO James Volk and EVP Edward McKay also made purchases during weak price periods, signaling strong management confidence in the company's prospects. Founded in 1902 and headquartered in Virginia, Shenandoah Telecommunications is a regional telecommunications provider serving customers across Virginia, West Virginia, Maryland, and other states through its Glo Fiber brand fiber optic internet services. The company employs approximately 1,089 people and provides broadband internet, video, and voice services to residential and commercial customers. Institutional investor activity has been particularly noteworthy, with Energy Capital Partners making substantial purchases from May 27-30, acquiring 110,652 shares at an average price of $12.06. However, the same transactions appear to be reported separately for Energy Capital Partners III and ECP Fiber Holdings GP, likely representing duplicate filings for a single transaction due to ownership structures. Financially, the company faces both challenges and opportunities. Q1 2025 revenue increased 26.9% year-over-year to $87.9 million, but the company posted a net loss of $0.19 per share, missing analyst expectations. The company has missed revenue estimates for four consecutive quarters, beating EPS estimates only once during that period. However, consistent revenue growth and fiber infrastructure expansion strategy provide long-term growth drivers. The telecommunications industry's fiber service demand continues growing due to remote work expansion and digital transformation acceleration. Shenandoah is pursuing revenue base expansion through Glo Fiber brand high-speed internet service expansion and diversification into managed network services for enterprise customers. While P/E ratio is meaningless due to net losses, the P/B ratio of 0.76 suggests the stock trades at a discount to book value. With a market cap of $692 million, this small-cap company maintains a stable investment base with 59% institutional ownership, including BlackRock's 13% stake. Insider trading experts suggest management's sustained buying likely reflects conviction about structural changes rather than simple market timing. The combination of the CEO's six-month consecutive buying pattern and recent major shareholder fund purchases is viewed as a positive signal. The upcoming Q2 earnings release on August 7th will focus on fiber service expansion effects and cost efficiency improvements. Analysts expect a $0.14 per share loss for Q2 but project continued revenue growth to $90.7 million. Long-term prospects include opportunities from 5G network deployment and smart city project expansion for regional telecommunications providers. Shenandoah's existing infrastructure and regional market dominance position it well to capitalize on these changes. Continued insider buying signals strong confidence in this long-term vision.

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