Insider Trades: Reporting season is over and these 14 ASX 200 directors bought the dip

Welcome back to the Insider Trades Series – A summary of on-market ASX 200 director transactions valued at more than $10,000. The trades have all taken place between 26 February and 4 March 2024.

There's been a notable uptick in trades among large cap directors. This period stands out as one where the volume of large-cap transactions outweighs those in small caps. Thematically, insiders have the tendency to buy into share price weakness or sell into strength. We'll explore some of the more interesting trades below.

Top ASX 200 Insider Buys

Key themes and takeaways:

All the above directors are Non-Executive Directors, with some serving as Non-Executive Chairmen. The term 'Non-Executive' is a consistent term across all their titles.

Directors are buying into share price weakness. Here's a brief summary of companies that reported weaker-than-expected results:

• EVT (-6.3% on 15 Feb): Half-year normalised net profit fell 26% as weather conditions weighted on the company's Thredbo business (winter and summer alpine resorts). Whilst the Group expects a record second-half result for its Hotel division, short-term external headwinds are anticipated for the Entertainment and Thredbo divisions.

• Nanosonics (-16.0% on 26 Feb): Nanosonics reported a disappointing half-year result that was already flagged in a late Jan trading update. The result contained another guidance downgrade, with management pointing to hospital budgetary pressures weighing on sales growth. The stock is now trading at levels not seen since 2019.

• Kelsian (-12% on 28 Feb): The half-year numbers (44.9% revenue growth to $982.7 million and statutory net profit growth of 44.1% to $28.1 million) missed analyst expectations as the company remained impacted by a range of issues including overtime payments, staff shortages and one-off weather events. Management also flagged $100 million in depreciation for FY25 despite burning through $150 million of capex this year.

• Lendlease (-14.0% on 19 Feb): Lendlease continues to face a challenging market backdrop including higher interest rates, dislocated capital markets and delayed project commencements. Investors have been patiently waiting a normalisation in earnings that would align with the company's 8-10% return on equity target for FY24. This goal remains more elusive than ever, with management revising guidance down to 7.0%.

Top ASX 200 Insider Sells

QBE's CEO Eases Stake: QBE reported its full-year result (year ended 31 December 2023) which was a slight miss on expectations due to a lower-than-expected COR guidance (Combined Operating Ratio measures the profitability of an insurers underwriting operations).

Analysts had mixed views about the guidance, with some seeing it as easy to achieve while others were not so confident. The stock experienced some extraordinary swings, including:

• Results day (16 Feb): Closed -1.7% lower, up from session low of -4.8%

• Next day (19 Feb): Rallied 3.7% after opening only 0.4% higher

• Since result (16 Feb to 5 Mar): 5.1% higher

"QBE is trading at a +12.0% premium to weighted international peers, which compares to a three-year average discount of ~0.4%, but this reflects peers being more affected by global economic challenges. There remains upside to QBE's valuation vs. bond yield expectations," Macquarie analysts said in a note dated 16 February. An Outperform rating was retained and target price increased to $17.10 from $16.60.

QBE Chief Executive Andrew Horton has sold a combined $1.85 million worth of shares since late February. This was equal to approximately a third of its exposure to the company.

QBE 12-month price chart (Source: Market Index)

IPH CEO Sells Into Weakness: IPH reported a set of first-half numbers that broadly met consensus expectations, including:

• Revenue up 21% to $274 million (1% below consensus)

• Net profit after tax up 5% to $50.8 million (in-line with consensus)

• Interim dividend of 16 cents per share (in-line with consensus)

• No guidance (usual practice)

• Strategic priorities include restoring growth in Asia, market share gains in Australia and continue to assess M&A opportunities

Goldman Sachs said the key negative from the result was the performance of the Asia business, which missed EBITDA expectations by 3% due to one US client reducing filings in the second half. The note dated 22 February reiterated a Buy rating with a $8.70 target price.

Despite positive analyst ratings and inline results, IPH shares are poised to close lower for a ninth consecutive session on Tuesday. The stock has declined nearly 15% since its half-year results, reaching levels not seen since March 2021.

Chief Executive Andrew Blattman sold $646,490 (100,000 shares) on the ex-dividend date.

IPH 12-month price chart (Source: Market Index)