Directors are buying these beaten down ASX battery stocks

Why do you buy or sell shares?

To increase your wealth, right?

And, why do you think company directors buy and sell shares?

Exactly.

Directors arguably have the best understanding of the current health of their business, as well as the business’s growth prospects. So, when a director is buying or selling large parcels of shares in their company, it’s worth taking note.

At Market Index we take director transactions very seriously. We feel there’s an informational edge to be gained here beyond traditional fundamental analysis of a company’s financials, or of its technicals.

But not all director transactions carry the same value for the discerning investor. More often than not, director transactions are merely the issue of free shares as part of a director’s performance or incentive package, or issued to them under a dividend reinvestment plan.

Of course it's still great to see each of these items, as they further align a director’s interests with the financial success of the company. But nothing says “I believe in this business” like a director putting a great big whack of cash where their mouth is. With this in mind, it’s the ‘On-market trade’ announcements you really want to keep an eye out for.

On-market trade means the director in question went into the market just like you or I, and stumped up their own cash to buy shares in their company. Their own hard-earned cash. We have to assume they can see value there. The bigger the purchase, surely then the greater the perceived value.

The new 7 Series does look awesome…who are we to begrudge?

It can go the other way as well. Directors don’t just buy their own stock, they’ll often sell it. One could argue we shouldn’t begrudge a director the occasional sale to pay for that new 7-Series BMW, or for renovations on the east wing of their mansion.

But, sizeable director sales are worth taking note of, especially when the company’s share price has been on a recent tear. Too many times I’ve seen large director sales coincide just about perfectly with a period of strong share price performance. It’s probably just pure coincidence that these sales often signal the top of the run (yeah right!).

We’ve got the good stuff

Each day, Market Index maintains a list of the 200 most recent director transactions on the ASX. Our clever tech nerds scrape this information from thousands of ASX company releases each day, and then put it in one easy to use table to help you with your research.

Even better, they used their big tech brains to determine which director transaction announcements are the boring old irrelevant ones, like issues of free shares, or dividend reinvestment plans, and which announcements are the all important “On-market trades”.

With a simple mouse click you can sort the list by the category, buy or sell, or by size of the transaction. Check out the complete list here.

Hmmm, that’s interesting…

Looking through today’s director announcements, I noticed a few interesting moves…

On-Market Buys

• Magnis Energy Technologies (ASX: MNS): Magnis was suspended on 2 October for not lodging its full year accounts. Not a good look. The beleaguered battery tech and graphite company was down a staggering 91% from its 2021 high by the time director Frank Poullas stepped into purchase $127,471 on 1 November (after the company returned from its suspension). Magnis has rallied 22% since Mr Poullas’ purchase.

• IGO (ASX: IGO): In keeping with the beaten down battery stocks theme, IGO Debra Barker purchased $48,488 worth of shares on 31 October. IGO had fallen 35% between 6 September and the close on 31 October.

• Transurban Group (ASX: TCL): Director Michelle Jablko purchased an impressive $561,802 worth of TCL stock on 27 October. TCL was down 22% from its April high up to that point, and is now trading 5% higher. Nice timing Michelle!

• EQT Holdings (ASX: EQT): Director Mick O’Brien purchased $364,930 worth of EQT stock on 30 October. This one is super interesting for me as unlike MNS, IGO, or TCL, EQT’s share price has been very strong over the past few months (check out the chart). No bargain hunting here, more likely a vote of confidence in the company which is clearly being matched by the broader market.

• SRG Global (ASX: SRG): Possibly a little bargain hunting here as director Peter McMorrow snaps up $154,820 of SRG stock following a 20% fall since its recent peak in July.

• Omni Bridgeway (ASX: OBL): Two buys here. Directors Raymond van Hulst and Karen Phin purchased $151,605 and $46,500 respectively on 31 October. Another case of coincidental great timing as OBL stock was down 69% from its 2022 high at that point. It’s rallied a handy 10% since. Again, nice timing!

• Whitehaven Coal (ASX: WHC): You probably own WHC for its amazing dividend, right? Well, director Anthony Mason recently snapped up $42,780 in WHC shares probably for the same reason!

On-Market Sells

• De Grey Mining (ASX: DEG): Director Peter Hood sold $296,340 worth of DEG stock on 31 October. No reason was supplied for the sale by the company. Mr Hood still owns over 2.9 million DEG shares. DEG shares were under heavy selling pressure in the lead up to this sale, so it’s not like Mr Hood was selling into a big rally.

• Kelsian (ASX: KLS): Proving it’s not always about 7 Series BMW’s, Kelsian director Niel Smith sold $1.2 million of KLS stock in the lead up to November 1. Smith noted the sales were to support The Relay Trust charity which provides educational and community infrastructure projects in several African countries. Kudos Mr Smith!

• Brambles (ASX: BXB): Big sales from CEO Graham Chipchase on 27 and 30 October totalling just over $1.9 million. According to the official transaction document the sales are to cover Mr Chipchase’s employer withholding tax liability arising upon the exercise and vesting of over 280,000 shares issued to him for meeting various performance hurdles. Fair enough, and Mr Chipchase still has plenty of skin in the game with over 1 million BXB shares in the kitty.