This Insider Has Just Sold Shares In Step One Clothing

Some Step One Clothing Limited (ASX:STP) shareholders may be a little concerned to see that the Founder, Gregory Taylor, recently sold a substantial AU$28m worth of stock at a price of AU$1.70 per share. That sale reduced their total holding by 13% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Step One Clothing

Step One Clothing Insider Transactions Over The Last Year

Notably, that recent sale by Gregory Taylor is the biggest insider sale of Step One Clothing shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$1.77. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 13% of Gregory Taylor's stake.

Insiders in Step One Clothing didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Step One Clothing insiders own about AU$236m worth of shares (which is 73% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

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

An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But it is good to see that Step One Clothing is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 2 warning signs for Step One Clothing you should know about.

But note: Step One Clothing may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.

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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.