Insider buying can provide clues about a stock’s next move. Insiders sell company stock for a number of reasons. Yet they only buy stock for one reason – they expect it to rise.
In this report, we are going to highlight a large insider purchase at Asana Inc (ASAN:US). Asana is a US technology company that offers a web and mobile application designed to help teams organize, track, and manage their work. Its platform is currently used by over 100,000 paying organizations and millions of teams worldwide. The company is listed on the New York Stock Exchange and currently has a market capitalization of $4.3 billion.
Insider buying at Asana
Our data shows that on September 7, Asana’s Co-Founder and CEO Dustin Moskovitz purchased 19.273 ASAN million shares at a price of $18.16 per share in a private placement. This trade cost the insider $350 million and increased his holding to 39.1 million shares.
One of the largest insider buys ever
This trading activity is worth highlighting due to its size. The fact that Mr. Moskovitz has invested $350 million in his own company – and increased the size of his holding by around 100% in the process – suggests that he is very confident in relation to the outlook for the company, and its share price. This trade represents one of the largest insider purchases ever made.
It’s worth noting that Mr. Moskovitz is a well-known technology entrepreneur. Prior to founding Asana, he co-founded Facebook. While at Facebook, he served as the company’s first Chief Technology Officer and VP of Engineering. So, he is likely to have a good understanding of his company’s prospects.
Asana, like many unprofitable tech stocks, has seen its share price fall heavily in 2022. Year to date, the stock is down about 65%.
However, the company continues to grow at a rapid clip. In the most recent quarter, the company recorded:
- 51% year-on-year growth in revenue
- 64% year-on-year growth in revenue from customers spending $5,000 or more on an annualized basis
- 105% year-over-year growth in the number of customers spending $100,000 or more on an annualized basis
Encouragingly, revenue for the quarter was 6% ahead of guidance while non-GAAP operating loss (-$0.34) was 14% ahead of guidance. The company noted that growth was driven by large enterprise deals and momentum in the US.
Looking ahead, Mr. Moskovitz was very confident that the company is well placed for continued success.
“I am investing further in Asana because I strongly believe the market opportunity is enormous and that the Work Graph is the best possible solution for helping enterprises achieve their most important goals. The market is ready and our customers are validating our strategy every day. With the additional $350 million in capital announced today, we believe we are fully-funded to execute on our current strategies and well-positioned to reach free cash flow positive before the end of calendar 2024,” he said.
In light of the growth being generated here, we see the insider buying as a bullish indicator.