There are two main reasons insiders invest in their own companies. They either believe that business is about to get better, or that the company is undervalued. Whatever the reason, insider buying tells us that those within the company expect the company’s share price to rise.

In this report, we are going to highlight some interesting insider buying at Charter Communications Inc (CHTR:US). Charter Communications is an American telecommunications and mass media company. The company is the second-largest cable operator in the US by subscribers, with over 32 million customers in 41 states. It is listed on the Nasdaq and currently has a market cap of $63.1 billion.

Insider Buying at Charter Communications

2iQ data shows that on January 31, board member Steven Miron purchased 2,500 CHTR shares at a price of $384.35 per share. This trade cost the insider approximately $961,000 and increased his holding to 9,173 shares.

Industry Experience

This trade is notable due to the fact that Mr. Miron has considerable industry experience. Previously, he served as President of Bright House Networks from July 2002 to May 2008 and as CEO from May 2008 until May 2016, when Bright House Networks was acquired by Charter. He currently serves as a director of Discovery, Inc. and was previously a member of the board of directors of C-SPAN, the National Cable & Telecommunications Association, and CableLabs.

Mr. Miron also has some investment experience. Currently, he is Senior Executive Officer at Advance, a private, family-held business that owns and invests in companies across media, entertainment, technology, communications, education, and other promising growth sectors.

What stands out here is that Mr. Miron has made a large purchase that has boosted the size of his position substantially. This suggests that he is very confident the stock is set to move higher.

Value Play

This appears to be a value play.

Over the last year, Charter Communications stock has fallen by around 34%. As a result, it now looks quite cheap.

Currently, Wall Street expects the company to generate earnings per share of $34.60 this year. That puts the stock on a forward-looking P/E ratio of just 11.9 – well below the market average.

It’s worth noting that a number of brokers are relatively upbeat in relation to the company’s prospects.

For example, analysts at JP Morgan believe that Charter is "running a good business” and expect low to mid-single digit EBITDA growth from current levels through a combination of broadband growth and price increases. They have an ‘overweight’ rating on the stock and a price target of $450.

Meanwhile, analysts at MoffettNathanson say that Charter is a "stable and moderate" growth story that will come with rising margins. They have an ‘outperform’ rating on the stock and a price target of $582.

In light of the low valuation here, we see the insider buying as a bullish signal.

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