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Director Trades: More buys than sells in sign of confidence for long-term outlook
Director Trades
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- Directors continued to add to their holdings as a volatile FY22 came to a close
- WiseTech Global co-founders continue large sell-offs; Richard White offloads another $30m of stock
- WOTSO non-executive chairman bullish on company as share price rallies more than 11% in June.
Director trades are often considered a good indicator of a company’s future prospects. Our fortnightly Director Trades column informs you who is buying in and who is selling down.
Often referred to as insider buying or selling, directors are legally permitted to buy and sell shares of the company and any subsidiaries. However, these transactions must be properly registered and divulged.
Insider buying or selling is not to be confused with insider trading, which is buying shares on the basis of non-public information, a big no-no and illegal.
We troll through the ASX company announcements looking at director trades of interest over the past fortnight. It’s usually the big ones that stand out or those coinciding with company news.
Directors may get shares as part of employee incentive schemes, share purchase plans, rights issues, participate in dividend reinvestment plans or purchase on-market. It’s the on-market trades we think are worth noting, where directors directly or indirectly through entities they are associated either put up cash or cash in a stake.
When a director buys shares on-market, it can signify confidence the share price will rise in the future and if multiple directors are buying, especially at larger amounts, that is even more of an indication. Of course, it’s not a sure win that the share price will rise, so it’s always worth further research on a company.
Directors will often buy company shares after a sharp price decrease. Directors may think the stock has been oversold and represents good value, sometimes they want to show confidence in their company’s future prospects, other times they’ve just got another good reason to buy or sell a stock which will be divulged, like paying the good ol’ taxman.
Fortnight overview
Markets have been volatile throughout 2022 and into the EOFY22. The S&P/ASX 200 VIX (ASX:VIX) index has climbed more than 78% in the year to date to ~18.87. The real time volatility index provides an insight into investor sentiment and expected levels of market volatility.
Stubbornly high inflation made worse by the war in Ukraine, hawkish central banks and slowing economies have impacted equity markets globally. The S&P/ASX 200 is down ~14% year to date and officially in correction territory, defined as a fall of 10% from its last peak which was August 2021.
But while there have been large sell-offs in June – including on June 14, when in $82 billion was wiped from the ASX in its worst session since March 2020 – directors have been somewhat bullish, buying their own dip, and showing faith in long term returns right up until EOFY22.
While there have been some large sales, there’s been more buys on-market from directors, some big and others not so, in a sign they’re willing to endure a wild ride but confident of long term gains in their companies.
Recent Large Director Buys
Scroll or swipe to reveal table. Click headings to sort.
| Code | Company | Director | Direct or Indirect | Date | Volume | $ | Nature of change |
|---|---|---|---|---|---|---|---|
| WOT | WOTSO Property | JR (Seph) Glew | Indirect | Jun 23-30 | 704,778 | $921,198.38 | On & off-market |
| EVN | Evolution Mining | James Askew | Indirect | Jun-30 | 100,000 | $244,303.21 | On-market |
| CBL | Control Bionics | Lindsay Phillips | Indirect | Jun-30 | 1,200,000 | $179,703 | On-market |
| LLL | Leo Lithium | Brendan Borg | Indirect | Jun-24 | 266,908 | $136,656.89 | On-market |
| EVN | Evolution Mining | Jacob Klein | Direct & Indirect | Jun-30 | 50,000 | $134,724.04 | On-market |
| RMC | Resimac Group | Duncan Paul Saville | Indirect | Jun-30 | 117,866 | $133,951 | On-market |
| RRR | Revolver Resources Holdings | Paul McKenna | Indirect | Jun 22-23 | 415,318 | $124,306 | On-market |
| CDA | Codan | Graeme Rodger Crawford Barclay | Indirect | Jun-27 | 15,000 | $107,520.00 | On-market |
| BOQ | Bank of Queensland | George Frazis | Indirect | Jun-24 | 14,750 | $100,003.53 | On-market |
| BFG | Bell Financial Group | Alastair Provan | Direct | Jun-24 | 100,000 | $93,970.00 | On-market |
| WTC | Wisetech Global | Michael Malone | Indirect | Jun-29 | 2,000 | $76,240.00 | On-market |
| LLL | Leo Lithium | Simon Michael Hay | Indirect | Jun 27 & 30 | 138,000 | $72,318.60 | On-market |
| EVN | Evolution Mining | Peter Smith | Direct & Indirect | Jun-30 | 10,000 | $24,375.33 | On-market |
Workspaces company WOTSO Property (ASX:WOT) non executive chairman JR (Seph) Glew indirectly made a large on-market and off-market trade according to an announcement. Glew now holds 65,613,808 shares in WOTSO. The company’s share price has defied the odds, climbing ~17% in the past month to $1.40.
Software solutions to the logistics industry WiseTech Global’s (ASX:WTC) independent non-executive director Michael Malone added to his holding and now has an interest of 3000 shares indirectly as co-founders of the company sold off holdings.
L1 Long Short Fund (ASX:LSF) saw joint managing directors and chief investment officers Raphael Lamm and Mark Landau continue to add to their holdings.
And directors continue to bet on their resources companies, including those at Leo Lithium (ASX:LLL) and Evolution Mining (ASX:EVL).
Recent Large Director Sells
Scroll or swipe to reveal table. Click headings to sort.
| Code | Company | Director | Direct or Indirect | Date | Volume | $ | Nature of change |
|---|---|---|---|---|---|---|---|
| WTC | Wisetech Global | Richard White | Direct & Indirect | June 17-30 | 849,228 | $31,267,834.34 | On-market |
| WTC | Wisetech Global | Maree Isaacs | Indirect | June 17-30 | 44,247 | $1,628,966.30 | On-market |
| JLG | Johns Lyng Group | Curtis Mudd | Direct | June 9-10, 14-16, 20 & 22-24 | 250,000 | $1,301,112.12 | On-market |
WiseTech founder, executive director and CEO Richard White continued to make large sell-downs in the final month of FY22. White has been making substantial sell-offs in the company he founded in 1994 and listed on the ASX in 2016.
Even after the large sell-offs, White still holds 1,898,963 directly in the company and 121,042,366 indirectly.
Meanwhile co-founder, executive director and head of licence management Maree Isaacs has also been selling off shares in the company. Isaacs holds 10,764,204 shares indirectly after her latest sale.
The WiseTech share price has fallen ~3% in the past month to $40.70.
Insurance builder Johns Lyng Group (ASX:JLG) non-executive director Curtis Mudd made a large sale. The company was recently named managing contractor of the Australian and NSW Government funded $142 million Property Assessment and Demolition Program.
Mudd still holds more than 830,000 shares in the company directly and indirectly. Johns Lyng has seen both large sell-off and buy-ups by directors in recent months.
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