Insider Trades: Directors are buying shares in these 9 small-to-mid cap ASX companies

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

Top ASX Insider Buys

The ASX's Latest Copper Producer

Hillgrove Resources announced the inaugural production of copper concentrate from its Kanmantoo mine in South Australia on 12 February 2024. It might be one of the first copper explorer-to-producer success stories in quite some time.

"First copper production from the Kanmantoo underground operation, and the transition to cashflow generation, is a watershed moment for the Company. Over the next few months, the mine output and copper production are expected to ramp up as the planned additional work areas are established underground," said Managing Director Lachlan Wallace.

From a share price perspective, the stock rallied around 60% between late November 2023 and early January 2024. The strength was consistent with how broader equity markets bottomed in early November and surged through to year end.

However, Hillgrove gave back all of its gains by late February. This weakness was compounded by a $10 million capital raise on 26 February, aimed at financing mine extension drilling activities at Kanmantoo. The raise issued new shares at 6 cents or a 10.5 discount to pre-raise prices.

Non-Executive Director Roger Higgins is buying into the recent share price weakness, purchasing 1.2 million shares ($73,044) at 6.1 cents.

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

The Lone Sell

Temple & Webster insiders have been aggressively selling into recent strength. The stock rallied almost 40% last month on the back of:

• Retail peers like Nick Scali (6 Feb) and JB Hi-Fi (12 Feb) reported better-than-expected earnings for the first-half of FY24

• Temple & Webster reported (13 Feb) first-half earnings that beat analyst expectations alongside a January trading update that revealed 35% year-on-year revenue growth

• eCommerce rival Kogan reported (26 Feb) first-half numbers that topped analyst expectations alongside a strong January trading update (EBITDA of $4.9 million, up 225% compared to the previous year). Kogan also issued an unexpected interim dividend of 7.5 cents per share.

Temple & Webster Chief Executive Mark Coulter has sold a combined 1.1 million shares or $13.5 million since the result ($7.7 million on 28 Feb and $5.75 million on 16 Feb). Coulter beneficially owns a remaining 1.97 million shares as well as 8.6 million options.

It's quite conflicting to see insiders offload a combined $20 million worth of shares following a strong first-half result and bumper trading update. To be fair, Temple & Webster shares are up 240% in the past twelve months. Vertical share price chart aside, Morgan Stanley analysts had some pretty positive things to say about the company.

"TPW has a long growth runway, dominant online position, margin upside, balance sheet flexibility and strong track record. 1H24 results show continued progress toward its targets of A $1bn in revenue (3-5 years) and EBITDA margins of 15%+ (long term)," the analysts said in a note dated 14 February.

An Overweight rating was retained with a $12.25 target price (previously $9.25).

Temple & Webster 12-month price chart (Source: Market Index)