Insider trades: The most important ASX insider buys and sells for the June quarter

In November last year, I wrote a wire titled ‘Nine stocks insiders are buying – and why it matters’.

The wire laid out some key research concerning how officers, directors and large shareholders buy and sell stock their own stock and their propensity to outperform the market when doing so.

The wire proved quite popular, with more than 20K engagements and 170+ likes, and a host of comments asking if we could make the deep-dive into insider moves a regular feature.

This wire is the first attempt to that end. With the help of my colleague Kerry Sun, we’ve broken down the insider moves from the last quarter and attempted to pull out some of the critical insights.

As always, who is buying and selling makes for fascinating reading and we’ll be sharing with you the companies that have seen multiple insiders buying and selling during the period, the top insider buys and sells by dollar amount and as a percentage of market cap, and the most profitable director transactions.

Multiple insiders making moves

For me, the number of insiders buying (or selling) their own stock is always the most telling insight from the data. 

Whilst some companies have one or two directors doing a lot of buying or selling (i.e. many transactions), when three, four, or more directors in the same company are all making the same move, it's a stronger signal. Let's not forget that these people all sit around the same board table and are all responding to the same stimulus. 

There were 35 companies that had three or more different insiders making moves during the June quarter, and they are listed below. I've also highlighted a few sets of transactions that really stand out. 

First, the bolters

The following four companies have seen big share price moves in the quarter, oftentimes quickly validating the buying that has taken place through the period. 

1. Damstra (ASX: DTC) insider moves (scroll right for full data)

Damstra (DTC) - Three-month chart

2. Infratil Limited (ASX: IFT) insider moves

Infratil Limited (IFT) - Three-month chart

3. Impedimed Limited (ASX: IPD) insider moves

Impedimed Limited (IPD) - Three-month chart

4. Kip Mcgrath Education Centres (ASX: KME) insider moves

Kip Mcgrath Education Centres (KME) - Three-month chart

Buying after a selloff

Whilst everyone likes instant gratification, the research shows that trades made when stock prices are far from an insider's anchor levels (the level that the insider ‘believes’ the company is worth) are the most informative. More specifically, insiders are willing to trade against their anchoring bias when they have information that allows them to overcome that bias. 

In other words, if insiders ‘know’ the stock is too cheap, they are happy to pile in, despite what the market is telling them by way of the share price.

With that in mind, here are two stocks that insiders have been buying after big falls.

1. Universal Store (ASX: UNI) insider moves

Universal Store (UNI) - Three-month chart

2. Vulcan Energy Resources (ASX: VUL) insider moves

Vulcan Energy Resources (VUL) - Three-month chart

• Resource stocks that have sold off amid weakening commodity prices (New Hope and Nickel Industries)

• Underappreciated small-cap stocks that have struggled for upside in recent months

New Hope (ASX: NHC) shares are down around 25% year-to-date while Newcastle coal futures are down around 65% in 2023. In late May, Macquarie retained a NEUTRAL rating with a $5.40 target price. The investment bank said that thermal coal prices have been under pressure and inflationary pressures remain but free cash flow yields are sitting at around 25% at current spot prices from FY25.

Nickel Industries (ASX: NIC) is a stock that’s had its moments but pretty much unchanged since October 2020, which is in line with how nickel spot prices are performing – down almost 30% year-to-date and back at late 2021 levels. Fundamentally, the company has been increasing its equity interest in various projects in Indonesia and is set to become one of the largest pure-play nickel stocks globally.

Stocks with the biggest total insider sells

Code	Company	Sum of all trades	1-Year
ASX: GMG	Goodman Group	-$ 20,087,100	8.48%
ASX: QAN	Qantas Airways	-$ 16,869,750	37.03%
ASX: MRM	MMA Offshore	-$ 15,442,155	106.03%
ASX: NEU	Neuren Pharmaceuticals	-$ 15,275,000	230.65%
ASX: WES	Wesfarmers	-$ 9,019,064	15.20%

Most of the biggest sells take place in one transaction. We’ll recap the top three:

Goodman Group’s (ASX: GMG) executive director Danny Peters sold exactly 1 million shares (approximately 22%) of his stake in the company between 19-25 May. This was a rather non-event as a) the company did not provide any context for the sale and b) Goodman shares fell around 1% across the six days he was selling and mostly unchanged since.

Outgoing Qantas (ASX: QAN) CEO Alan Joyce sold 2.5 million shares ($16.9m) on 1 June – The same day the company bought back 1.85 million shares as part of its on-market buyback. This effectively absorbed 75% of Joyce’s sale. Between 1-9 June, Qantas shares fell for six consecutive days, down 8.8% to a near four-month low.

On a side note – When Joyce became CEO of Qantas in 2008, the average age of the company’s aircraft was 8.6 years – the youngest fleet of any major airline in Australia at the time. Today, the average age of a Qantas aircraft is 14.7 years – higher than the average age of most other major airlines such as Cathay Pacific (10.5 years) and Emirates (8.9 years).

MMA Offshore (ASX: MRM) offers vessel and logistics services via its fleet of 18 vessels across Australia. It’s a major turnaround story, and that’s reflected in its recent share price performance, up almost 100% in the past twelve months but still down around 25% in the past five years. Non-executive Director Peter Kennan is also the Chief Investment Officer of the Black Crane Asia Pacific Opportunities fund. He sold $15.4 million worth of shares and resigned from his role at MMA. It was a rather bittersweet departure, where he says:

"Despite facing a prolonged challenging period, the Company has repaired its Balance Sheet and successfully transitioned into an integrated service provider across multiple markets," said Kennan.

"The Black Crane Asia Pacific Opportunities Fund has now attained its targeted investment returns from MMA and is therefore divesting its position to reallocate capital to alternative investments," he added.

Adding market cap into the mix

Goodman Group has a market cap of almost $37 billion – Which makes the $20 million insider sell worth just 0.5% of its market cap.

To add a bit more colour, I found the largest total buys/sells as a percentage of market cap.

Among the top five – Three names (Cleanspace, Tymlez and Forbidden Foods) had market caps of less than $10 million, down more than 75% in the past twelve months and very illiquid. 

The most profitable directors

What’s interesting is that all three stocks rallied, took a breather and then continued to rally. Even amid current volatile market conditions, all three are within 10-20% of recent highs.

Conclusion

As we have mentioned before, you shouldn't sleep on insider buying and selling. There is clear evidence, gathered over big data sets and long periods that show that insider moves are correlated with outperformance.

We hope you enjoyed this deep dive into the June quarter data. If you did, make sure to give it a like and feel free to offer suggestions about what else we could do to illuminate the data. 

Also, if you have a stock that you have been watching and even had success with by following the insider moves, make sure to let us know in the comments.