Why the Asaleo Care Ltd share price has been crushed today

Unfortunately for its shareholders, the Asaleo Care Ltd (ASX: AHY) share price has been one of the worst performers on the market this morning.

At the time of writing its shares are down almost 8% to $1.65.

What happened?

Although there was no material news out of the personal care and hygiene company today, after the market closed on Friday Asaleo released a change of director’s interest notice to the market.

That notice revealed that its CEO and managing director Peter Diplaris sold 1,156,341 shares in the company. By offloading these shares, it halved his stake in the company.

As we saw on Friday with a2 Milk Company Ltd (Australia) (ASX: A2M), the market doesn’t react well to insiders selling shares.

Especially following the insider selling at Bellamy’s Australia Ltd (ASX: BAL) prior to its fall from grace. So I can’t say I’m surprised to see its shares fall today.

According to the release Mr Diplaris has sold his shares for personal reasons including meeting family tax obligations, and remains fully committed to Asaleo’s long-term goals and growth.

Should you buy the dip?

Following today’s decline, Asaleo’s shares are changing hands at just under 14x trailing earnings.

Whilst this is cheap in comparison to the rest of the market, it may be justified considering management has forecast low single-digit profit growth this year.

As I’m not overly optimistic on the company’s future given the challenging retail environment, I suggest investors stay clear of Asaleo for the time being and focus elsewhere in the market.

These three explosive growth shares, for example, would be far better options than Asaleo in my opinion.

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.