• Director trades remain strong as the ASX continues its mercurial trend
  • Wisetech founder Richard White continues to make large selldowns
  • Coal companies see both big buys and sells recently among directors

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.

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

ASX director buying activity has continued to be strong going into the last month of the Australian fiscal year as global markets continue to feel the pressure of higher inflation, aggressive central bank rate hikes and geopolitical uncertainty. Markets have continued to be somewhat mercurial in the past fortnight with the S&P/ASX 200 index now down  ~6% year to date and up ever so slightly at 0.08% for the past month.

The RBA on Tuesday lifted rates 50 basis points rise to increase the cash rate to 0.85%, reaffirming its commitment to contain inflation, which it forecasted will hit 6% by the end of 2022, before easing to around its target of 3% by mid-2024.  Whether directors intend to buy more or sell down during what is forecasted to be continued volatility in the months ahead time will tell.
 

Recent Large Director Buys

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Coal miner New Hope Corporation (ASX:NHC) saw its chairman and Robert Dobson Millner and his non-executive son Thomas Charles Dobson Millner both pony up for  200,000 shares fort $735k on June 1. Robert Millner, aged 71, is the head of the fourth generation family business, Washington H. Soul Pattinson & Co (ASX:SOL), one of Australia’s oldest publicly listed companies and chairman of New Hope among other high profile companies.

Robert now holds 279,559 New Hope shares directly and 4,943,215  indirectly, while his son Thomas holds 21,153 directly and 4,853,215 indirectly.  Non-executive director Jacqueline Elizabeth McGill  also purchased shares in the company recently.

New Hope has seen its share price rocket 128% in the past year to $3.90.  Here, leading technical analyst Carl Capolingua gives a quick enlightening look at the Aussie coal sector.

Diversified tech company PPK Group (ASX:PPK) saw long term director Glenn Molloy up his stake in the company and buy ~$833k worth of stock between May 31 and June 6.

In an announcement, PPK, which is focusing on battery and nanotechnologies, said the shares were made indirectly on-market as part of Molloy’s capacity as “executor of the estate of Mr Graeme Webb”.

Insurance builder Johns Lyng Group (ASX:JLG) executive director and director of investor and business relations Adrian Gleeson recently purchased more than $400k worth of stock. He’s bullish on the company.

JLG has been named managing contractor of the Australian and NSW Government funded $142 million Property Assessment and Demolition Program, which is providing free structural assessments of eligible flood impacted properties in 58 local government areas.

The company recently saw two JLG directors together sell down more than $13 million in stock to manage their personal asset portfolios. 
 

Recent Large Director Sells

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Software solutions to the logistics industry WiseTech Global (ASX:WTC) founder Robert White continued to make a series of large sell downs. He still holds a significant chunk of the company with 2,549,899 shares directly and 121,877,028 indirectly.  White has been making a series of large sells in the company he founded in 1994 and listed on the ASX in 2016 in recent months. 

Allegiance Coal (ASX:AHQ) informed the market that following Mark Gray stepping back from his former roles as chairman and managing director, he had reduced his equity by about 50% in the company.  Gray sold about $1.9 million worth of stock on June 7.

“Mr Gray remains focused and committed to the success of Allegiance. He has been retained by the board as an executive director to assist the company achieve the planned developments and growth targets from its existing portfolio of assets including New Elk, Black Warrior, Short Creek and Tenas,” the company said.

Investment company Ariadne Australia (ASX:ARA) saw independent non-executive director Christopher Michael Barter make a large sale in the company.  The company’s share price has risen ~22% in the past year to 67 cents.

As the old saying goes, death and taxes are the only certainty in life. According to announcements from DroneShield (ASX:DRO), CEO and managing director Oleg Vornik and independent non-executive director Peter James had to sell down stakes to cover tax liabilities.

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