Insiders are adept at buying when their stock is cheap - so who has been making moves?

LiveWire04-12

Welcome to the fifth instalment of our quarterly breakdown of ASX insider moves, brought to you by myself, my colleague Kerry Sun, and Dr David Allen from Plato Investment Management. Quick recap If ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2426449002?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2024-04-12 10:00","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2426449002","market":"us","top_or_hot":-1,"title":"Insiders are adept at buying when their stock is cheap - so who has been making moves?","media":"LiveWire","content":"<div>\n<p>Welcome to the fifth instalment of our quarterly breakdown of ASX insider moves, brought to you by myself, my colleague Kerry Sun, and Dr David Allen from Plato Investment Management. \nQuick recap\nIf ...</p>\n\n<a href=\"https://www.livewiremarkets.com/wires/insiders-are-adept-at-buying-when-their-stock-is-cheap-so-who-has-been-making-moves\">Source Link</a>\n\n</div>\n","source":"livewire_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Insiders are adept at buying when their stock is cheap - so who has been making moves?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nInsiders are adept at buying when their stock is cheap - so who has been making moves?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-12 10:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.livewiremarkets.com/wires/insiders-are-adept-at-buying-when-their-stock-is-cheap-so-who-has-been-making-moves><strong>LiveWire</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Welcome to the fifth instalment of our quarterly breakdown of ASX insider moves, brought to you by myself, my colleague Kerry Sun, and Dr David Allen from Plato Investment Management. \nQuick recap\nIf ...</p>\n\n<a href=\"https://www.livewiremarkets.com/wires/insiders-are-adept-at-buying-when-their-stock-is-cheap-so-who-has-been-making-moves\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"AD8.AU","symbol_name":"AUDINATE GROUP LTD","start_time":0,"source_url":"https://www.livewiremarkets.com/wires/insiders-are-adept-at-buying-when-their-stock-is-cheap-so-who-has-been-making-moves","article_id":"2426449002","we_media_id":null,"thumbnails":[],"rights":{"source":"livewire_stock","url":"https://www.livewiremarkets.com/wires/insiders-are-adept-at-buying-when-their-stock-is-cheap-so-who-has-been-making-moves","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2426449002","pubTimestamp":1712887203,"sourceInfo":{"source_id":"livewire_stock","name":"Livewire Markets"},"weMediaInfo":null,"summary":"Welcome to the fifth instalment of our quarterly breakdown of ASX insider moves, brought to you by myself, my colleague Kerry Sun, and Dr David Allen from Plato Investment Management.If you're new to the series, you can get a recap on the research that drives the series and the previous instalments via the links below:. Nine stocks insiders are buying - and why it matters. Insider trades: The most important ASX insider buys and sells for the June quarter. As always, who is buying and selling makes for fascinating reading. We’ll be sharing with you the following:. analysing which directors have been buying into weakness or momentum, and vice versa. Dr Allen will also share a fund manager's perspective, highlighting why it pays to \"follow the money\" by looking back at a previous successful trade. He also shares a new opportunity that has come up on Pand some of the shorts Plato has been making. Please scroll to the right for the full dataset - scroll bar at the bottom of the table","collect":0,"end_time":0,"defaultTopTitle":"livewiremarkets.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"AD8.AU":"AUDINATE GROUP LTD","BK7504":"锂钴概念","BK7128":"专卖店","BK7050":"调查和咨询服务","BK7083":"煤与消费用燃料","BK7073":"电子制造服务","WHC.AU":"WHITEHAVEN COAL LTD","BK7115":"航天航空与国防","BK7095":"多种金属与采矿","BK7507":"资源股","BK7503":"科技股","LTR.AU":"LIONTOWN RESOURCES LTD","IPH.AU":"IPH LTD","BK7049":"互联网与直销零售","TPW.AU":"TEMPLE & WEBSTER GROUP LTD","BBN.AU":"BABY BUNTING GROUP LTD","BK7107":"家庭装饰零售","DRO.AU":"DRONESHIELD LTD"},"translate_title":"内部人士擅长在股票便宜时买入——那么是谁在采取行动呢？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BBN.AU":1,"WHC.AU":1,"TPW.AU":1,"LTR.AU":1,"IPH.AU":1,"DRO.AU":1,"AD8.AU":1},"content_text":"Welcome to the fifth instalment of our quarterly breakdown of ASX insider moves, brought to you by myself, my colleague Kerry Sun, and Dr David Allen from Plato Investment Management. \nQuick recap\nIf you're new to the series, you can get a recap on the research that drives the series and the previous instalments via the links below:\n\nNine stocks insiders are buying - and why it matters\nInsider trades: The most important ASX insider buys and sells for the June quarter\n\nInsider trades: The most important ASX insider buys and sells for the September quarter\n\n\nDirectors went Christmas shopping: Insider moves for the December quarter\n\n\nAs always, who is buying and selling makes for fascinating reading. We’ll be sharing with you the following: \n\ncompanies that have seen multiple insiders buying and selling during the period\n\nanalysing which directors have been buying into weakness or momentum, and vice versa\nthe top insider buys and sells by dollar amount\nDr Allen will also share a fund manager's perspective, highlighting why it pays to \"follow the money\" by looking back at a previous successful trade. He also shares a new opportunity that has come up on Pand some of the shorts Plato has been making\n\nMultiple insiders making moves\nAs always, when multiple insiders buy or sell, my interest is piqued. During the March quarter, 32 companies (down from 45 in the prior quarter) had three or more different insiders making moves, which are listed below. I've also analysed under what type of circumstances the transactions occurred, based on 3-month and 1-year performance. \nPlease scroll to the right for the full dataset - scroll bar at the bottom of the table\n\n\n\nTicker\nCompany\nUnique\nDirectors\nSum\n  of Trades\n3-MonthPerformance\n1 Year\nOutcome\n\n\nBBN\nBaby\n  Bunting \n5\n$138,814\n1.10%\n-9.40%\nBuying 1-year weakness\n\n\nWHC\nWhitehaven\n  Coal\n5\n$418,013\n-10.50%\n-0.10%\nBuying both weakness\n\n\nAD8\nAudinate\n  Group\n4\n-$4,641,515\n26.00%\n140.80%\nSelling both strength\n\n\nIGO\nIGO\n4\n$547,814\n-16.80%\n-41.70%\nBuying both weakness\n\n\nLM8\nLunnon\n  Metals\n4\n$205,820\n-60.00%\n-78.40%\nBuying both weakness\n\n\nTAH\nTabcorp\n  Holdings\n4\n$254,796\n-3.90%\n-28.20%\nBuying both weakness\n\n\nA1M\nAic\n  Mines \n3\n-$70,089\n19.10%\n-8.50%\nSelling 3-month strenth\n\n\nALA\nArovella\n  Therapeutics \n3\n$56,224\n-4.20%\n130.00%\nBuying 3-month weakness\n\n\nALX\nAtlas\n  Arteria\n3\n$71,481\n-8.90%\n-16.10%\nBuying both weakness\n\n\nBOL\nBoom\n  Logistics \n3\n$104,044\n17.40%\n3.90%\nBuying both strength\n\n\nCLV\nClover\n  Corporation \n3\n$25,106\n-38.50%\n-57.40%\nBuying both weakness\n\n\nCUP\nCount \n3\n$150,665\n-21.40%\n0.00%\nBuying 3-month weakness\n\n\nCWY\nCleanaway \n3\n$587,355\n1.50%\n10.30%\nBuying both strength\n\n\nDDR\nDicker\n  Data \n3\n$231,278\n-8.30%\n28.80%\nBuying 3-month weakness\n\n\nDJW\nDjerriwarrh\nInvestments \n3\n$72,184\n-1.60%\n6.00%\nBuying 3-month weakness\n\n\nDRO\nDroneshield \n3\n-$11,939,287\n108.10%\n136.90%\nSelling both strength\n\n\nEE1\nEARTHS\n  Energy \n3\n$168,551\n-70.70%\n-70.70%\nBuying both weakness\n\n\nELS\nElsight\n3\n$23,060\n6.50%\n36.70%\nBuying both strength\n\n\nFOS\nFOS\n  Capital \n3\n$13,096\n-12.50%\n10.50%\nBuying 3-month weakness\n\n\nGNC\nGraincorp \n3\n$139,901\n19.70%\n22.30%\nBuying both strength\n\n\nHLI\nHelia\n  Group \n3\n-$288,418\n-11.90%\n30.50%\nSelling 3-month weakness\n\n\nIPD\nImpedimed \n3\n$307,678\n-38.00%\n0.00%\nBuying 3-month weakness\n\n\nIPH\nIPH \n3\n-$465,663\n-7.20%\n-19.90%\nSelling both weakness\n\n\nKNG\nKingsland\n  Minerals \n3\n$33,474\n-3.50%\n86.70%\nBuying 3-month weakness\n\n\nLLC\nLendlease\n  Group\n3\n$338,348\n-11.40%\n-13.80%\nBuying both weakness\n\n\nLSF\nL1\n  Long Short Fund \n3\n-$1,704,082\n-4.40%\n0.00%\nBuying 3-month weakness\n\n\nM2M\nMT\n  Malcolm Mines\n3\n$19,300\n-20.00%\n-41.50%\nBuying both weakness\n\n\nNHC\nNew\n  Hope\n\n3\n$986,768\n-12.80%\n-22.70%\nBuying both weakness\n\n\nORA\nOrora \n3\n$81,375\n-15.00%\n-31.30%\nBuying both weakness\n\n\nSUM\nSummit\n  Minerals \n3\n$29,700\n-25.00%\n-37.50%\nBuying both weakness\n\n\nTPW\nTemple\n  & Webster \n3\n-$19,669,977\n39.70%\n224.00%\nSelling both strength\n\n\nXRG\nXreality\n  Group \n3\n$78,019\n10.00%\n-29.20%\nBuying 1-year weakness\n\n\n\nAs has been explained in the first wire that introduced this series, research shows that the percentage of insider trades falls away as the share price moves from around 52-week lows, to very close to the 52-week highs. Put simply, insiders buy more when their stocks are incredibly cheap, and buy less when they are expensive (or, as will be seen below, start selling)\nIt should come as no surprise then that the main set of conditions under which insiders in the table above were buying was \"buying both weakness\" - which translates to buying stock, when the share price is down over BOTH a 3-month and 1-year period. 11 of the 32 sets of transactions occurred under these conditions. As for the rest; \n\n9 instances saw insiders buying on 3-month weakness (despite 1-year positive performance) - this cohort is 'buying the dip'\n4 instances saw insiders buying on both 3-month and 1-year strength - these are the momentum riders\n3 instances saw insiders selling on both 3-month and 1-year strength - with the 1-year share price gains for the stocks in this cohort up 140% (Audinate (ASX: AD8)), 136.9% (Droneshield (ASX: DRO)) and 224% (Temple and Webster (ASX: TPW))\n\nThe big counts\nIn the March quarter, we saw five directors buying stock in both Baby Bunting (ASX: BBN) and Whitehaven Coal (ASX: WHC). \nFor Baby Bunting, the total was a modest $138,000, with most of the transactions occurring on the 22nd and 23rd of February which, as can be seen below, has proven to be a nice little trade so far. \n\n\nBaby Bunting price chart with director buys marked in green (Source: TradingView)\nFor Whitehaven Coal, the total was a modest $418,000, with most of the transactions occurring on the 16th and 20th of February. \n\n\n\n\n\n\n\n\n\nWhitehaven Coal price chart with director buys marked in green (Source: TradingView)\nSelling into strength: It's not always bad\nThe analysis below was contributed by Kerry Sun.\nPicture this: You're the Managing Director, Founder and/or Chief Executive of a richly valued but fast-growing company. Between mid-2021 and mid-to-late 2022, your company's valuation took a significant hit, down anywhere from 20 to 70%. Valuations have rebounded sharply in the past couple of months, reaching or even surpassing the highs of mid-2021. Your company is reporting record earnings and expects another set of record numbers for the year ahead. Given all this, selling some shares might sound pretty reasonable. \nThis has been the case for several directors in the March quarter. Although their selling activities initially caused some short-term fluctuations in share prices, in the majority of instances, the share prices quickly recovered.\nThe companies that fit the above description include (amount sold plus % of market cap):\n\n\nAudinate ($4.6 million or 0.27%)\n\nDroneshield ($11.9 million or 2.52%)\n\nDUG Technology ($666,970 or 0.21%)\n\nHelia Group ($288,418 or 0.03%)\n\nTemple & Webster ($19.7 million or 1.36%)\n\nVentia Services ($5.6 million or 0.18%)\n\n\nWisetech Global ($600,000 or less than 0.01%)\n\n\nOne of the most intriguing selldowns was from DUG Technology - a $330 million market cap company that provides high-performance computing as a service (i.e. clients access supercomputing resources via the cloud, without the need to own their own infrastructure). In late November 2023, Managing Director Matthew Lamont sold 2.5 million shares ($4.6 million) and in the March quarter, Non-Executive Director Louise Bowner sold a further $666,970 worth of shares.\nBoth selldowns resulted in some short-term share price volatility. Although it might have taken a few weeks for the stock to stabilise, it eventually resumed its upward trajectory, fuelled by the accelerating demand for AI.\n\n\n\n\n\n\n\n\n\nDUG Technology share price chart with sell-downs marked in red (Source: TradingView)\nA Fund Manager's Perspective\nThe analysis below was contributed by Dr David Allen\n“Follow the money!”, the line immortalised in the 1970s’ classic All the President’s Men reminds us that the source of political corruption can be brought to light by following the financial paper trail. \nIn the same vein, forensically scrutinising insider transactions is an invaluable way of helping to anticipate moves in company revenue, earnings and prices. We are in no way suggesting corruption is afoot, merely self interest. Indeed, last quarter, in this column, we noted that the CEO of Liontown (ASX: LTR) had disposed of around $1m worth of stock in December. A few days after that wire was published, the company disclosed that its financing syndicate had fallen through, and the stock price fell 26% in a day.\n\n\nLiontown share price chart with CEO's sell-down marked in red (Source: TradingView)\nWhat are we seeing at Plato this quarter? \nIn our long/short fund, we sold out of intellectual property services firm IPH Ltd (ASX: IPH). The CEO and Managing Director sold 100,000 shares on 27 February. \n\n\n\n\n\n\n\n\n\nIPH share price chart with CEO sell-downs marked in red (Source: TradingView)\nSeveral observations piqued our interest. \n\nFirst, the size of the transaction (over $600k). \nSecondly, CEO and CFO transactions are the most informative. \n\nFurther, the stock price had been weak, off around 40% since 2022. As Chris rightly pointed out, insider selling after periods of stock price weakness is unusual and tends to be a bad omen for things to come. \nWe are also seeing a number of other warnings signs for IPH Ltd using Plato’s 150 Red Flags. Cashflow margin has been falling over the last two years, there has been an increased capitalisation of intangibles, our models suggest aggressive accounting, and of course the CEO is selling when the stock price has already taken a beating.\n\n\n\nNever miss an update\n\n    Enjoy this wire? Hit the ‘like’ button to let us know. \n    Stay up to date with my current content by \n    following me below and you’ll be notified every time I post a wire","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2426449002"}