2022 has provided an unusual start to the year. Indices have chopped about, growth stocks have fallen out of favour in place of value stocks and the general volume is low. One thing that we have been looking out for is what stocks are being bought up by companies, wether that is share re-purchases or insider buying from directors and boards. Asana stock caught our eye.

Asana Inc

Asana is a web and mobile application designed to help teams organise, track and manage their work. They released their IPO at the end of September 2020. It opened at $27 and rose to highs of $145 in November 2021, up 440%. Asana are a company that benefited from the pandemic, with many companies asking employees to work from home. This drove the demand for their product as managers looked at ways to look after their teams.

In November, many software stocks fell back. Asana dropped 22% in a day. In December, the company released earnings. Revenue climbed 70% to over $100M, but they still reported a net loss of $69.3M. Updated fiscal 2022 revenue guidance rose to $371M, above estimates of $359M. Ultimately, the price fell further as investors were looking for turned away from growth stocks.

The good news for this company is that though it’s spending aggressively to maximise its revenue expansion right now, cash and short-term equivalents still totalled $344M at the end of October, offset by a term loan of just $35.6M.  

Insider buying

The CEO of Asana is Dustin Moskovitz, an American internet entrepreneur who co-founded Facebook, Inc. with Mark Zuckerberg, Eduardo Saverin, Andrew McCollum and Chris Hughes. In 2008, he left Facebook to co-found Asana with Justin Rosenstein.

Since the start of December, Dustin has purchased an extra 6.5 million shares, taking his total to 16.24 million. That’s 17% of the company worth a total of $1B, double the investment that he had before December. Note that all these purchases were made after the stock dropped on earnings. The CEO is taking advantage of buying shares at this price.

Growth stocks to come back in favour?

Growth stocks may continue to sell-off as the market adjusts. But if the CEO is buying so much, is there something he knows that we don’t? Most likely. We think Asana may offer a great long term buying opportunity. There is a strong possibility that software to assist working remotely will continue to grow and the workplace demand to be in offices never returns to what it was before the pandemic.

The Asana stock price is now at $60, down nearly 60% from highs. The daily chart is forming a descending wedge which is a bullish signal. Buyers look to be coming in at these prices.

AlphaPicks does not own shares in Asana. To buy shares and crypto, register here with our preferred partner, EToro.

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