If ( ) isn’t the worst UK stock to have owned over the past few years, it’s certainly up there. Or down there, as the case may be. Since June 2020, the boohoo share price has lost 93% of its value and now trades for 29p! ‘Ouch’ almost doesn’t quite cut it.
However, a couple of notable insiders have been buying the fast fashion stock recently. Should I follow suit? Let’s discuss. Insiders are bullish Earlier this month, boohoo co-founder Carol Kane upped her stake in the company, snapping up 320,943 shares at a price of 31p.
That purchase cost just under £100k. Then yesterday (22 January), filings revealed that she’d splashed out another £99k on a further 330,295 shares at 30p each. Back in December, new CEO Dan Finley bought 294,350 worth of stock.
The price for those? Also £99,000. As legendary Wall Street investor once observed: “ .” Clearly then, insiders see value on offer here, and the stock does look cheap on paper trading at just 0.
3 times sales. Why does boohoo now trade for pennies? Now, I wouldn’t rush out to buy a struggling share just because executives have been doing so. I want to know the reasons why it has fallen so much.
In the case of boohoo, it has faced many challenges. The main ones include weakened consumer demand, high inflation, supply chain scandals, and increasing product returns from customers. Arguably the biggest problem though has been intense competition from fast fashion giant Shein.
Quite simply, it is beating boohoo at .
