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Director Trades
This month we’ve combined our Trading Places and Director Trades because January seemed to still be holiday month for directors with little trades to report.
Firstly, our Trading Places column tracks substantial shareholder movements – namely when a trade in a company’s stock crosses or falls below the 5% threshold.
Substantial shareholders are usually directors, individual investors, institutional investors… or their distant (and not-so-distant) relatives, which they will refer to as listed related bodies corporate or something similar. You can see in detail these listed bodies on the company’s ASX announcement.
Shareholders are required to publicly declare via the exchange when their personal stake goes below or above 5%, and from there, every movement in their holdings while owning above 5%.
Those becoming and those ceasing to be substantial shareholders are the ones we think are worth noting, where a trade takes an investor over the 5% threshold or has them drop back below.
Our monthly ASX Director Trades column on the other hand 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 based on non-public information, a big no-no and illegal.
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.
Global share markets started 2023 optimistically rallying in January despite economic hurdles. In Australia the benchmark S&P ASX 200 rose 6.2%, its best month since March 2022 and according to S&P Dow Jones Indices, its best start to a year ever.
Australia’s inflation rate shot to a 33-year high in the last quarter to 7.8% YoY, or 1.9% QoQ. The headline figure, which was 7.3% in the previous quarter, came in better than the Reserve Bank of Australia predicted at 8%, but higher than the economists’ consensus of 7.5%.
The RBA yesterday announced a 25bp rate hike to a cash rate of 3.35% at its first board meeting of 2023, spooking the local bourse with forecasts of future hikes to bring inflation back to its target of between 2-3%.
And while large on-market director trades remained quiet in January, who was ceasing to and becoming substantial shareholders picked up. Here’s some that got our attention at the month’s end.
Swipe or scroll to reveal full table. Click headings to sort.
| Code | Company | Market cap | Date | Holder | Holding |
|---|---|---|---|---|---|
| WHC | Whitehaven Coal | $7.46B | Jan-31 | State Street Corporation and subsidiaries named | 5.00% |
| ADR | Adherium Limited | $9.96M | Jan-30 | Bank of America Corporation and related bodies corporate | 5.18% |
| TER | Terracom | $650.45M | Jan-31 | Bank of America Corporation and its related bodies corporate | 5.10% |
| BEN | Bendigo and Adelaide Bank | $5.65B | Jan-27 | State Street Corporation and subsidiaries named | 5.13% |
| NAN | Nanosonics | $1.45B | Jan-27 | JPMorgan Chase & Co. and its affiliates | 5.06% |
| STR | Star Entertainment Group | $4.06B | Jan-31 | Australian Retirement Trust Pty Ltd | 5.66% |
| ALD | Ampol | $7.36B | Jan-30 | Australian Retirement Trust Pty Ltd | 5.00% |
One of Australia’s largest superannuation funds Australian Retirement Trust (ART) has become a substantial shareholder in scandal-plagued Star Entertainment Group (ASX:SGR).
In December investment bank UBS placed a Buy rating on SGR which has seen its share price fall 34% in the past six months in what was a tough and controversial 2022 for the casino operator.
As The Australian reported SGR is still “sporting the bruises of the royal commission and accusations it broke a number of gambling and corporate regulations.”
Meanwhile, ART has also become a substantial shareholder in petroleum company Ampol (ASX:ALD), which saw its share price rise 14% in the last month after releasing an update on its Lytton Refiner Margin (LRM) for the fourth quarter.
ALD said LRM remained above historical levels, averaging US$11.75 per barrel and compares favourably to the US$11.24 per barrel realised in the fourth quarter of 2021.
Swipe or scroll to reveal full table. Click headings to sort.
| Code | Company | Market Cap | Date of change | Holder |
|---|---|---|---|---|
| EVN | Evolution Mining | Jan-30 | State Street Corporation and subsidiaries named | |
| SFR | Sandfire Resources | Jan-31 | State Street Corporation and subsidiaries named | |
| DOW | Downer EDI | Jan-27 | Aware Super Pty Ltd as Trustee of Aware Super | |
| PPT | Perpetual | Jan-27 | First Sentier Investors Holdings Pty Ltd and its related bodies corporate | |
| SPA | Spacetalk | Jan-27 | Regal Funds Management Pty Ltd and its associates | |
| ESS | Essential Metals | Jan-27 | JPMorgan Chase & Co. and its affiliates |
Perhaps it was profit taking or maybe the shine has simply dulled in gold miner Evolution Mining (ASX:EVN) for State Street Corporation, which ceased to become a substantial shareholder on January 30.
State Street has also ceased to become a substantial shareholder in copper stock Sandfire Resources (ASX:SFR) which is a pick of Shaw and Partners senior investment advisor Adam Dawes.
The EVN share price has risen 0.30% in the past month and 18.30% in the past six months. The SFR share price is up 4.68% in the past month and 28% in the past six months.
| Code | Company | Director | Direct or Indirect | Date | Volume | $ | Nature of change |
|---|---|---|---|---|---|---|---|
| ADN | Andromeda Metals Limited | James Edward Marsh | Direct | January 13-16 | 1,902,153 | $110,722 | On-market |
| TEK | Thorney Technologies | Alex Waislitz | Indirect | January 12-18 | 1,297,709 | $2,058,942 | On-market |
South Australian kaolin explorer Andromeda Metals (ASX:ADN) managing director James Marsh has ponied up for more than $110k worth of shares in January.
ADN is working on becoming a halloysite-kaolin producer by progressing its flagship Great White Project.
Commenting on the project in its latest quarterly update, Marsh said “it represents a significant, long-term opportunity for Andromeda and we are further de-risking the project as we move closer towards a final investment decision.”
ADN in November signed a binding offtake agreement with IMCD for the exclusive sale of the trademarked Great White HRM concrete and Great White SRM suspension aid additives for Australia and New Zealand.
The company has appointed a new managing director/CEO, Robert (Bob) Katsiouleris, who is expected to start in April, while Marsh will transition to executive director, sales and marketing.
In its quarterly update ADN reported a 31% decrease in cash outgoings compared to the prior quarter, to $3.65 million and said a private ruling from the ATO confirmed an immediate tax deduction of $117 million relating to Andromeda’s acquisition of Minotaur Exploration Ltd.
The ADN share price has rallied 6% in the past month but is down 47% for the past six months.
Code Company Director Direct or Indirect Date Volume $ Nature of change WGO Warrego Energy Limited Mark Routh Direct & Indirect Jan 27-30 10,341,475 $3,840,352 On-market
Warrego Energy (ASX:WGO) non-executive director Mark Routh directly and indirectly sold more than $3.8 million worth of stock during January.
Routh directly sold 3,333,333 fully paid ordinary shares while indirectly selling a further 7,008,142 which were held by his wife Anne Routh.
He still holds directly 7,105,922 fully paid ordinary shares, while his wife sold down her holdings.
However, according to the announcement he has elected to participate in the acceptance facility established by Gina Rhinehart owned Hancock Energy in connection with its takeover offer.
The Hancock Acceptance Facility enabled WGO shareholders to indicate their intention to accept the Hancock takeover offer, but without being obliged to do so unless Hancock received acceptances under the offer totalling 40% or more of WGO shares in which case the offer increased to 36 cents/share.
On Monday WGO announced Hancock Energy’s updated 36 cents/share offer valuing the oil and gas explorer at A$440 million ($304 million) had received the necessary 40% approval.
As a result, all Warrego shareholders who accepted Hancock’s offer will now receive 36 cents/share.
Stockhead’s Bevis Yeo has given a good outline of the high stakes deal which you can read here.
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