Insider Trades: Who’s buying their own stock on the back of FY23 results?

The data below observes on-market ASX 200 director buys valued at more than $10,000 between 23 August and 28 August 2023.

Most of these companies saw their share prices rise during the period in question, with a couple of exceptions including Telstra and Cleanaway.

The pair of $100,000 stock buys, from Tabcorp Holdings chief executive Adam Rytenskild and chairman Bruce Akhurst followed a mixed set of results for FY23. Their transactions also came ahead of an important decision for the wagering and gaming company, which is expecting a decision on its Victorian wagering licence next month.

Tabcorp Holdings (ASX: TAH)

Results day and share price move: Thursday 24 August +4.29%

Results recap: The wagering company’s FY23 result delivered one beat, two misses on analyst expectations as NPAT and revenue undercut consensus.

Broker views: Macquarie said: “We see Tabcorp as fair value, balancing downside risks within wagering and possible upside from the Victorian wagering licence outcome.” Retained Neutral rating and price target of $1.15.

Food for thought: After the initial jump, the share price retraced the gain and was down 8% by the time the market closed on Friday 25 August but is now back to the level it hit on the day of the result, closing at $1.10 on Thursday 31 August. The market is now eagerly awaiting the outcome of the Victorian wagering licence process, which is expected to conclude in October.

Cleanaway Waste Management (ASX: CWY)

Results day and share price move: Thursday 24 August -4.14%

Results recap: Cleanaway reported FY results that were largely in line with broker expectations, with a slight beat at the top line (revenue of $3.56 billion versus consensus of $3.42 billion) and a miss at the bottom (underlying NPAT of $148.6 million versus the $150.9 million analysts were looking for).

Broker views: JPMorgan maintained OVERWEIGHT but lowered the price target to $2.95 from $3.

Food for thought: Management used the earnings announcement as an opportunity to release a three-year earnings target of $450 million – this is at least a 50% increase on last year, but is largely in line with what brokers anticipate (consensus is looking for $460 million). After the initial share price fall, the stock gained back more than 3% by Wednesday’s close and ended Thursday at $2.62. Cleanaway currently trades 6.7% below the 12-month high point of $2.82 it hit in mid-June.

Telstra (ASX: TLS)

Results day and share price move: Thursday 17 August -2.82%

Results recap: The telco reported another period of solid growth and positive progress on its T25 strategy. Key financial results included total income of $23.1 billion, up 5.4% versus the $23.4bn expected by analysts and reported EBITDA of $7.9 billion, in line with consensus.

Broker views: Morgans said: “achieved a return above its cost of capital, few others in the sector have; potential for growth in InfraCo if free cash flow can grow at a mid-teens compound annual growth rate; Divestment of InfraCo assets seems unlikely, although still possible; Optimism about potential of AI-requiring infrastructure such as InfraCo Fixed.” Downgraded to HOLD from Add and lowered PT to $4.20 from $4.70.

The market disappointment has been attributed largely to the fixed enterprise’s underperformance, a segment that felt the pinch of price pressures. While the mobile business showed resilience, declines from other areas weighed on overall earnings.

Food for thought: The share price fell further in the days following the result, dropping another 3.8% to close at $3.97 on 21 August. Telstra’s stock traded at $4.01 at the market close on Thursday 31 August.

This article was originally published on Marketindex.com.au on Friday 1 September 2023.