Buy Your Own Dip Special: Which directors have been topping up during the downturn?

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• Directors have not been shy to add to their holdings during recent market downturns
• Peter Warren Automotive Holdings and Domain Holdings among biggest buys since  June 14 heavy sell off
• Multiple directors in various companies buying dips including high growth tech stocks plus resources companies

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 topsy-turvy to say the least throughout 2022, culminating in $82 billion being wiped from the ASX on Tuesday, June 14 in its worst session since March 2020. The market dived 5% or 349.4 points to 6582.6 points in the opening minutes of trade following a broad Wall Street sell off. Millions were wiped from company market caps.

Rising inflation, hawkish central banks and slowing economies have had investors jittery. The S&P/ASX 200 is down ~14% year to date and is  officially in correction territory, defined as a fall of 10% from its last peak which was August 2021.

Since June 14, markets have remained volatile with more red than green but there is some positive signs and one is director trading activity. Whether trying to nab a bargain or show faith in their companies there has been some large buys since that grim Tuesday and in a further optimistic signal to investors directors are keen to hold their positions with little sell downs.

So, who doubled down and brought their own dip?

Recent Large Director Buys

Scroll or swipe to reveal table. Click headings to sort.

Topping up family legacy

Leading the buyers is Peter Warren Automotive Holdings (ASX:PWR) executive director Paul Warren, who ponied up for more than $2 million worth of shares on June 15.

The car dealership has operated in Australia for more than 60 years with Paul the eldest son of company’s founder, Peter Warren. He has worked in the business since 1975, taking over executive management in 1982. He now holds indirectly holds 63,493,488 in total ordinary shares.

Domain bullish

Domain Holdings Australia (ASX:DHG) chairman and non-executive director Nick Fallon has purchased more than $1.5 million worth of shares in the company.

The Australian digital property portal and associated real-estate industry business was founded by Fairfax Media, when the publisher branded their real-estate sections in print with the Domain brand and first established an online presence in 1999.

Fairfax was delisted from the ASX in 2018 and is now owned by Nine Entertainment Co (ASX:NEC).  Fallon is also an independent non-executive deputy chairman of NEC (so the transaction is listed under both NEC and DHG).

The DHG share price has fallen ~14% in the past month to $2.78.

Directors buy up Hub 24

Directors in fintech Hub 24 (ASX:HUB) have been buying up the stock during recent downturns. Managing director Andrew Alcock purchased nearly $200k worth of shares, while other no-executive directors also topped up their holdings.

The Hub 24 share price has fallen more ~22% in the past month to $18.82.

Betting on a long-term gain

L1 Long Short Fund (ASX:LSF) saw its leaders make the most of any downturn adding to their holdings.   The company saw chairman Andrew Larke, along with joint managing directors and chief investment officers Raphael Lamm and Mark Landau all add substantial amounts to their holdings.

Like its name suggests LSF offers investors a diversified portfolio of long and short positions. LSF has seen its share price fall ~11% in the past month to $2.52.

Other trades worth noting

Directors in resources stocks also bought big during the dip, including those at Galan Lithium (ASX:GLN) and copper producer Austral Resources (ASX:AR1)

Chair of Oooh Media (ASX:OML) and ReadyTech Holdings (ASX:RDY) Tony Faure took the opportunity to add to his holdings in the two companies during the market sell off, while other directors also ponied up for shares.

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