Insider Sellers Might Regret Selling Step One Clothing Shares at a Lower Price Than Current Market Value

Step One Clothing Limited's (ASX:STP) stock price has dropped 28% in the previous week, but insiders who sold AU$28m in stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of AU$1.70 is still lower than the current share price.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Step One Clothing Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Founder, Gregory Taylor, for AU$28m worth of shares, at about AU$1.70 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$0.51. So it may not tell us anything about how insiders feel about the current share price.

In the last year Step One Clothing insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Step One Clothing

I will like Step One Clothing better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Step One Clothing insiders own 63% of the company, currently worth about AU$59m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Step One Clothing Tell Us?

It doesn't really mean much that no insider has traded Step One Clothing shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Step One Clothing insiders selling. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Be aware that Step One Clothing is showing 3 warning signs in our investment analysis, and 1 of those is a bit concerning...

Of course Step One Clothing may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.