12-month performance: +130% Insider activity: Bullish Buying pattern: Large purchase from CEO Recent news: Good full-year results
AO World is an online retailer that specialises in electrical products. Operating in the UK and Germany, the company sells electrical goods directly to consumers as well as to businesses. It is listed on the London Stock Exchange and currently has a market capitalisation of £817 million.
AO World shares have soared over the last few months as the market for electrical goods has moved online due to Covid-19 lockdowns. Since the beginning of May, AO’s share price has risen from 57p to 171p – a gain of 200%. Recently, the company stated that it expects online sales to remain strong post Covid-19. “As we move towards a new normal, we would expect the online market in electricals to maintain a higher share than prior to Covid-19” it said in an update in May. More recently, the company said: “We believe this crisis has had a seismic impact on retail and that many shoppers will have been permanently converted to online shopping.”
Source: 2iQ Research
What has caught our attention here is the fact that Co-Founder and CEO John Roberts purchased 154,495 AO World shares at a price of 144p per share in mid-July. This purchase, which cost the insider a total of £222,473, was his first purchase since June 2017. Roberts co-founded AO World around 20 years ago meaning that he is likely to have a thorough understanding of the business and its potential. This recent purchase suggests that he is confident about the future and still sees value in the stock after its recent rise. We see this insider transaction as a bullish signal.
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