Insider trading in Asana, Inc (NYSE: ASAN) has been a bit volatile over the last year, although the bias is clearly to the upside. The CEO and a director went on a purchasing binge after two lower-level insiders made little, intermittent sales of their stock. The net of buying and selling transactions over the past year is worth 1.5% of the market cap with shares at $60, about 3.4% of the total shares. Insider ownership stands at nearly 54.5%. That's a lot of insider skin, and the majority of the purchases were made in the previous 90 days. In fact, two transactions by the same CEO and director account for 4.004 million shares or roughly $291.08 million. Now, activity hit a peak in Q4 and has been slowly declining, but net activity is still firmly bullish and it’s very early in Q1.
Institutional activity has also been very robust this year, with $1.7 billion of purchases posted. That's roughly 15% of the market cap, and shares are trading at around $60, giving total institutional control of almost 30%. Unlike insider buying, institutional trade is not shown in this chart.
The firm met expectations in the last three months, but shares dropped dramatically on worries about slowing growth, from 72% YOY in the previous quarter to just 70% in Q3. This was exacerbated by a decrease in billings growth to 56% from the mid-eighties, which was taken advantage of by short sellers. Short interest reached a peak of 12 percent before the release, helping to push the stock down over 60 percent in the time since.
This is an opportunity to buy a stock that the analysts and institutions have verified. In our opinion, price action has been decoupled from reality and driven to an extreme low, setting the firm up for a big resurgence later this year.
Ittai Kidron, an analyst with Oppenheimer, said that Asana's billings growth levels "can be misleading, given the changing mix of monthly [and] annual subscriptions and the impact of large deals." Oppenheimer has a buy recommendation and an outperform rating on the stock and the high price target of $115.
The Technical Outlook: Asana, Inc Is Nearing A Bottom
The price of Asana has dropped significantly in the last two months, and it's possible that it'll continue to fall. The price is still uncertain, but there are indications that a bottom may be near. Price action since the early December 2021 low has been to the side and established support at these levels. The stochastic and MACD are trending away from the price action, indicating that the market is ready to reverse. Assuming these levels remain stable, we would expect to see the market bottom out for another month or two until new information surfaces or the firm releases Q4 results. Whatever the case, insiders and institutions believe now is a good time to buy, and we aren't going against them on that.