Director Trades: This is how you make money from small caps
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Last week three people illustrated how you get rich from being a director of a publicly traded company: get given stock or options and sell when the price is high.
Mike Ververka, the boss of online lottery company Jumbo Interactive (ASX:JIN), made $2.2m by converting options into stock and then selling up.
He’s made a cash profit of $17.7m since September last year, from exercising options he received as incentives to grow the company.
His options were worth $3.50 when he received them but on Friday the Jumbo share price was $16.80.
At bike dashcam maker Cycliq (ASX:CYQ), chairman/CEO Chris Singleton also got some incentives as well as stock as an interest payment on a loan he’d made to the company.
The incentive shares were worth a solid $68,827 — 0.7c — when the stock was trading at 0.3c on Friday. The interest shares were also priced at 0.7c.
Cirralto (ASX:CRO) managing director Adrian Floate is still on the journey, but has the right idea.
He’s being partly paid in stock: $103,996 worth.
The stock he was paid is worth slightly more than the market price of the shares — 0.95c versus 0.8c — much like with Singleton. If both men are confident in where their companies can go, it’d be well worth holding on a selling once the share prices have some upwards momentum.
Three of the largest buyers last week were picking up stock on market — that is, paying for it out of their own pocket because they want to, not because the company is raising money or giving away free stuff.
The buying was led by one of the few women to ever appear among the big director traders, Katrina Doyle at Alcidion (ASX:ALC).
Given the health software maker has been on a massive run since mid-April, Doyle didn’t exactly time her purchase well.
She bought on April 26, eight days after Alicidion’s share price took off after two years in the wilderness.
But not to worry: on Friday it was still climbing.
Two directors were selling on market.
One of those sellers, Justin Osborne at Gold Road (ASX:GOR), said he was only selling to pay off a tax bill.
Johns Lyng Group’s (ASX:JLG) Adrian Gleeson didn’t say why he sold $404,000 of stock.
|Code||Company||Director||Change||Date||Volume||$||What||Total holdings controlled|
|JIN||Jumbo Interactive||Mike Veverka||Buy||23-30 April||250,000||$3,072,125||Exercise of options||9656848|
|ATS||Australis Oil & Gas||Jonathan Stewart||Buy||30 April||2,857,143||$1,000,000||Placement||65835002|
|JLG||Johns Lyng Group||Adrian Gleeson||Sell||24 April||130,000||$404,427||On market||1,442,517|
|MPR||MPower Group||Nathan Wise||Buy||1 May||6,663,461||$346,500||Placement||77,071,518|
|GOR||Gold Road Resources||Justin Osborne||Sell||30 April & 1 May||184,175||$171,060||On market||4381235|
|ALC||Alcidion Group||Katrina Doyle||Buy||26 April||2,000,000||$165,400||On market||33156347|
|ASG||Autosports Group||Nicholas Pagent||Buy||17-18 April||138,000||$165,398||On market||104,452,574|
|DUB||Dubber Corporation||Peter Pawlowitsch||Buy||24 April||263,157||$100,000||On market||3409348|
|CRO||Cirralto||Adrian Floate||Buy||2 May||10,947,013||$103,996||Shares in lieu of director fees||55,870,291|
|CYQ||Cycliq Group||Chris Singleton||Buy||1 May||14,475,286||$101,327||Shares as incentives and as interest on a loan.||22,575,286|