Insider Buying

Insider Buying Report: ASOS PLC (ASC:LN)

ASOS PLC
(ASC:LN)
12 months:
-82.02%
Activity:
Bullish
Pattern:
Purchases from three insiders
News:
Profit warning
ASOS PLC
(ASC:LN)
12 months:
-82.02%
Activity:
Bullish
Pattern:
Purchases from three insiders
News:
Profit warning

Insider transactions can give investors a more complete view of activity within the world’s publicly-listed companies. No one has more information in relation to a company, and its prospects, than its executives and directors.

In this report, we are going to highlight some interesting insider buying at ASOS PLC (ASC:LN). ASOS is a UK-based online fashion retailer that operates globally. Through its website, asos.com, the company sells approximately 85,000 branded and own-brand products. It’s listed on the London Stock Exchange and currently has a market capitalization of £887.9 million.

ASOS: Insider Buying

Our data shows that on June 16, three insiders at ASOS purchased stock. Those who picked up shares were:

  • Outgoing Chairman Ian Dyson (6,000 shares @ £8.28 per share)
  • Next Chairman Jorgen Lindemann (57,392 shares @ £8.54 per share)
  • Board member Patrick Kennedy (30,000 shares @ £8.10 per share)

Combined, the three insiders spent around £783,000 (approx. $965,000) on stock.

Bullish Buying Pattern

This trading activity is worth highlighting for a couple of reasons.

Firstly, we have a clear ‘cluster buying’ pattern here with multiple insiders buying simultaneously. This buying pattern is one of the most bullish insider transaction patterns as it indicates that those within the company share the view that the stock is set to move higher.

Secondly, two of the three insiders here have made very substantial purchases and increased the size of their positions significantly. Mr. Kennedy’s purchase increased his holding from 23,000 shares to 53,000 shares while Mr. Lindemann’s purchase increased the size of his holding from 4,660 shares to 62,052 shares. This suggests these insiders are very confident the stock will climb higher.

Profit Warning

ASOS recently posted a profit warning.

In a trading update posted on June 16, the company advised that profits will be lower than expected this year due to a significant increase in returns and inflationary pressures on consumers. As a result of these issues, it now expects annual adjusted pre-tax profit of between £20 million and £60 million. Analysts had been expecting £83 million, according to Refinitiv data. The company also advised that revenue this year is only expected to grow by 4-7% – well below the company’s long-term growth rate.

On the back of this trading update, the share price plummeted, falling over 30% and hitting a 12-year low.

The buying from insiders here suggests that they believe the issues the company is facing are short term in nature and that the share price will bounce back at some stage in the future.

We see this insider buying as a bullish indicator.

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