Cogent Communications (NASDAQ:CCOI) Shares Gap Down After Insider Selling

Key Points

• Cogent Communications experienced a significant drop in share price after CEO Dave Schaeffer sold over 2.6 million shares, indicating a 54% decrease in his ownership.
• Brokerage firms have recently downgraded their price targets for Cogent, with Goldman Sachs setting a new target at $62.00 and Citigroup reducing their target to $33.00.
• The company will pay a quarterly dividend of $1.015 per share, showing an increase from the previous quarterly dividend and reflecting a yield of 12.3% despite a recent negative earnings report.

Shares of Cogent Communications Holdings, Inc. (NASDAQ:CCOI - Get Free Report) gapped down prior to trading on Tuesday following insider selling activity. The stock had previously closed at $32.36, but opened at $31.18. Cogent Communications shares last traded at $32.61, with a volume of 377,347 shares trading hands.

Specifically, CEO Dave Schaeffer sold 818,909 shares of the stock in a transaction dated Friday, August 8th. The shares were sold at an average price of $27.50, for a total transaction of $22,519,997.50. Following the completion of the transaction, the chief executive officer owned 697,143 shares of the company's stock, valued at $19,171,432.50. This trade represents a 54.02% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. Also, CEO Dave Schaeffer sold 1,840,669 shares of the stock in a transaction dated Thursday, August 7th. The stock was sold at an average price of $32.60, for a total transaction of $60,005,809.40. Following the transaction, the chief executive officer directly owned 1,516,052 shares of the company's stock, valued at approximately $49,423,295.20. This trade represents a 54.84% decrease in their position. The disclosure for this sale can be found here.

Wall Street Analyst Weigh In

Several brokerages have weighed in on CCOI. The Goldman Sachs Group lowered their target price on shares of Cogent Communications from $71.00 to $62.00 and set a "neutral" rating for the company in a research note on Friday, May 9th. UBS Group reduced their price target on shares of Cogent Communications from $102.00 to $75.00 and set a "buy" rating on the stock in a research report on Friday, May 9th. Royal Bank Of Canada reissued a "sector perform" rating and set a $40.00 price target (down previously from $74.00) on shares of Cogent Communications in a research report on Friday. Finally, Citigroup cut shares of Cogent Communications from a "buy" rating to a "neutral" rating and reduced their price target for the stock from $67.00 to $33.00 in a research report on Tuesday. Two analysts have rated the stock with a sell rating, four have assigned a hold rating and two have issued a buy rating to the company. Based on data from MarketBeat.com, the company presently has an average rating of "Hold" and an average target price of $63.00.

Cogent Communications Trading Up 2.1%

The company's fifty day moving average is $47.47 and its two-hundred day moving average is $57.46. The stock has a market cap of $1.63 billion, a price-to-earnings ratio of -7.22 and a beta of 0.68. The company has a quick ratio of 2.31, a current ratio of 2.31 and a debt-to-equity ratio of 49.06.

Cogent Communications (NASDAQ:CCOI - Get Free Report) last issued its earnings results on Thursday, August 7th. The technology company reported ($1.21) earnings per share for the quarter, missing the consensus estimate of ($0.93) by ($0.28). The firm had revenue of $246.25 million during the quarter, compared to analyst estimates of $247.79 million. Cogent Communications had a negative net margin of 21.57% and a negative return on equity of 117.56%. The firm's revenue was down 5.4% compared to the same quarter last year. During the same period last year, the business earned ($0.68) EPS. On average, research analysts predict that Cogent Communications Holdings, Inc. will post -4.55 EPS for the current fiscal year.

Cogent Communications Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Friday, September 5th. Shareholders of record on Thursday, August 21st will be issued a dividend of $1.015 per share. The ex-dividend date of this dividend is Thursday, August 21st. This is an increase from Cogent Communications's previous quarterly dividend of $1.01. This represents a $4.06 dividend on an annualized basis and a yield of 12.3%. Cogent Communications's dividend payout ratio is -88.99%.

Cogent Communications announced that its board has authorized a share repurchase program on Thursday, August 7th that authorizes the company to buyback $100.00 million in outstanding shares. This buyback authorization authorizes the technology company to buy up to 4.6% of its shares through open market purchases. Shares buyback programs are typically an indication that the company's management believes its shares are undervalued.

Institutional Trading of Cogent Communications

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. CANADA LIFE ASSURANCE Co raised its holdings in Cogent Communications by 0.3% during the fourth quarter. CANADA LIFE ASSURANCE Co now owns 52,679 shares of the technology company's stock worth $4,055,000 after purchasing an additional 156 shares in the last quarter. Yousif Capital Management LLC grew its position in shares of Cogent Communications by 1.4% during the second quarter. Yousif Capital Management LLC now owns 15,815 shares of the technology company's stock worth $762,000 after acquiring an additional 212 shares during the last quarter. Itau Unibanco Holding S.A. grew its position in shares of Cogent Communications by 58.9% during the fourth quarter. Itau Unibanco Holding S.A. now owns 618 shares of the technology company's stock worth $48,000 after acquiring an additional 229 shares during the last quarter. Ipswich Investment Management Co. Inc. grew its position in shares of Cogent Communications by 0.6% during the first quarter. Ipswich Investment Management Co. Inc. now owns 42,739 shares of the technology company's stock worth $2,620,000 after acquiring an additional 260 shares during the last quarter. Finally, Franklin Resources Inc. grew its position in shares of Cogent Communications by 5.8% during the fourth quarter. Franklin Resources Inc. now owns 4,835 shares of the technology company's stock worth $373,000 after acquiring an additional 263 shares during the last quarter. Institutional investors and hedge funds own 92.45% of the company's stock.

About Cogent Communications

Cogent Communications Holdings, Inc, through its subsidiaries, provides high-speed Internet access, private network, and data center colocation space services in North America, Europe, Oceania, South America, and Africa. The company offers on-net Internet access and private network services to law firms, financial services firms, and advertising and marketing firms, as well as heath care providers, educational institutions and other professional services businesses, other Internet service providers, telephone companies, cable television companies, web hosting companies, media service providers, mobile phone operators, content delivery network companies, and commercial content and application service providers.

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