With ASOS Plc's (LON:ASC)) price down 4.3% this week, insiders might find some solace having sold UK£1.5m worth of shares earlier this year.

By
Simply Wall St
Published
January 23, 2022
LSE:ASC
Source: Shutterstock

Over the past year, insiders sold UK£1.5m worth of ASOS Plc (LON:ASC) stock at an average price of UK£51.00 per share allowing them to get the most out of their money. The company’s market cap plunged by UK£101m after price dropped by 4.3% last week but insiders were able to limit their loss to an extent.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for ASOS

ASOS Insider Transactions Over The Last Year

The insider, Nicholas Beighton, made the biggest insider sale in the last 12 months. That single transaction was for UK£1.5m worth of shares at a price of UK£51.00 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (UK£22.37). So it may not shed much light on insider confidence at current levels. Nicholas Beighton was the only individual insider to sell over the last year.

In the last twelve months insiders purchased 13.18k shares for UK£366k. But they sold 29.56k shares for UK£1.5m. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
AIM:ASC Insider Trading Volume January 23rd 2022

I will like ASOS better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. ASOS insiders own about UK£76m worth of shares (which is 3.4% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The ASOS Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of ASOS insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 1 warning sign for ASOS you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.