Insider Purchases Worth UK£1.1m See Losses As ASOS Market Value Drops To UK£483m \

Insiders who acquired UK£1.1m worth of ASOS Plc's (LON:ASC) stock at an average price of UK£7.42 in the past 12 months may be dismayed by the recent 11% price decline. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth UK£580k, which is not what they expected.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for ASOS

The Last 12 Months Of Insider Transactions At ASOS

The Independent Non-Executive Chairman Jorgen Lindemann made the biggest insider purchase in the last 12 months. That single transaction was for UK£490k worth of shares at a price of UK£8.54 each. That means that even when the share price was higher than UK£4.06 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

ASOS insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around UK£7.42. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership Of ASOS

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that ASOS insiders own 2.6% of the company, worth about UK£12m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At ASOS Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think ASOS insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that ASOS is showing 3 warning signs in our investment analysis, and 2 of those are concerning...

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.

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