TPG Telecom (ASX:TPG) share price storms higher on insider buying news

The TPG Telecom Ltd (ASX:TPG) share price is storming higher after two executives bought a total of $1 million worth of shares…

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The TPG Telecom Ltd (ASX: TPG) share price has been a positive performer on Wednesday.

In afternoon trade, the telco giant’s shares are up almost 4% to $5.28.

Despite this gain, the TPG share price is still down a disappointing 25% since the start of the year.

This compares to a 15% gain by arch-rival Telstra Corporation Ltd (ASX: TLS) and a 5% gain by the S&P/ASX 200 Index (ASX: XJO).

Why is the TPG share price underperforming?

The main catalyst for the weakness in the TPG share price this year was the shock news that its Founder and Chairman, David Teoh, resigned from the company with immediate effect in March.

Mr Teoh revealed that he felt that now was the right time to step aside and pursue other interests.

Also putting pressure on the TPG share price was recent news that Stephen Banfield will be stepping down as Chief Financial Officer after 20 years with the company.

Though, he will remain in the role until November 2021 or until a replacement is appointed.

Why are its shares bouncing back today?

The TPG share price was given a boost today by the release of a second change of director’s interest notice in as many days.

On Tuesday, a notice revealed that the company’s Non-Executive Director, Robert Millner, picked up 100,000 shares via an on-market trade on Friday. Mr Millner paid a total consideration of $544,050, which equates to $5.44 per share.

This afternoon, a second notice reveals that the company’s Chief Executive Officer, Iñaki Berroeta, has snapped up 116,000 shares through an on-market trade today. Mr Berroeta paid a total of $599,580 for the shares, which equates to an average of $5.17 per share.

Judging by their purchases, these two executives appear to believe the TPG share price has been oversold in 2021.

One broker that is likely to agree is Morgans. Last week the broker put an add rating and $7.17 price target on its shares. This followed the release of a trading update which revealed that its performance in FY 2021 is tracking to internal expectations.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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