ASX All Ords retail share Universal Store Holdings Ltd (ASX: UNI) crashed by almost 25% in just two weeks and three company directors have enthusiastically bought the dip.
One took a ‘go hard or go home’ approach and ploughed more than $1 million of his own money into the fallen ASX All Ords stock.
Why did this ASX All Ords share crash in May?
At the closing bell on the last day of April, Universal Store shares were worth $4.70 each.
The ASX All Ords retailer finished trading yesterday at $3.15, up 2.27% on the day.
Meantime, the S&P/ASX All Ordinaries Index (ASX: XAO) closed 1.2% lower following the 12th interest rate hike by the Reserve Bank yesterday.
So, what happened to this ASX All Ords retailer in May?
Universal Store shares were already drifting down before the wheels came off on 24 May.
The company released a trading update that actually revealed a lot of positives, including an expected record year of sales in FY23 worth between $258 million to $261 million, up 25% on FY22.
But the ASX All Ords company also noted some customers were starting to tighten their belts.
According to the statement: “The group expects this subdued environment to continue for the balance of FY23 and into FY24.”
This admission probably threw a lot of ASX All Ords investors.
There had been speculation that youth-focused retailers would likely be protected from the impact of rising interest rates because their customers typically don’t own their homes.
Anyway, investors and traders hit the sell button and sent the ASX All Ords share crashing 29% on the day.
Directors pounce on buying opportunity
Non-executive director David MacLean appears to have jumped at the opportunity to buy in the low $3 range.
He purchased 344,000 Universal Store shares for a bit over $1,085,000 on 24 May and 25 May.
The ASX All Ords stock was purchased in several batches through several funds in the early $3 range. MacLean hasn’t traded any shares since September 2021.
Chair and non-executive director Peter Birtles also bought the dip on the day of the big tumble.
He purchased 20,000 shares on-market at $3.0376 per share for just over $60,000. This bumped up his personal holdings by 10%. That was his first trade since November 2020.
Non-executive director Trent Peterson outdid his colleagues on price.
Peterson waited til 29 May and 30 May to buy 100,000 shares on-market at an average price of $2.914. So, he paid just over $291,000 all up. His last trade was in October 2021.
Some ‘instos’ bail, some sail after trading update
It’s interesting to note that a few institutional investors who had been substantial holders (that is, they owned 5% or more of the company) reduced their investments in the days after the trading update.
They included Commonwealth Bank of Australia (ASX: CBA), First Sentier, and Mitsubishi UFJ Financial Group.
But two ‘instos’ went the other way and raised their stakes in the ASX All Ords share.
Spheria Asset Management bought just over 1.2 million shares, raising its position in Universal Store from 7.6% to 8.85% on 1 June.
Milford Asset Management bought just under 1.2 million new shares and increased its stake from 5.4% to just under 7% on 2 June.
Should you buy this ASX All Ords share?
Goldman Sachs was quick to recommend Universal Store shares as a buy after the trading update.
The top broker retained its buy rating on Universal Store but reduced its 12-month share price target by almost a third to $5.05. That means there’s still plenty of upside for investors today.
Goldman estimates the ASX All Ords share will pay fully franked dividends of 20 cents per share in FY23 and 24 cents in FY24.
Based on the Universal Store share price today, this implies a dividend yield of 6.3% and 7.6%, respectively.
