Earlier today I sold a small portion of my Appen (ASX: APX) shares. This follows an earlier lightening of the load in April.
I remain optimistic about the company’s long term prospects but am not encouraged by sizeable insider sales. The CEO, Chairman and a long-serving Non-executive director all sold at least 20% of their direct holdings.
At current levels it has a FY20E P/E of about 45x and an estimated P/E ratio of around 35x for the year to December 2021. While it can probably grow into those valuations, especially in the current environment, I’m not overly bullish given the director selling. I’m happy with my current 2.5% holding.
One thing is certain is that the company remains on my wish-list of companies to buy (at the right price) in a recession, and I would likely buy more at around $20 (and possibly higher), just as I did in March.
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