Insider Trades: Tech, mining and biotech directors are betting on these 11 ASX small caps

Welcome back to the Insider Trades Series – Small Cap Edition. This is a weekly summary of on-market ASX director transactions for companies from the most speculative corners of the market. The trades have all taken place between 21 and 26 June 2024. Directors have up to 5 business days to notify the ASX of their trades.

Top Explorer Buys

Byron Energy announced its intention to delist from the ASX in mid-May, citing several reasons:

1. Share price undervalues Bryon’s assets

2. Raising capital is highly dilutive

3. Limited trading and liquidity

4. Costs savings

However, these reasons raise some questions:

1. If shares are undervalued, why haven't directors been buying more on-market? In the past four years, only $315,000 worth of shares have been purchased by directors in just three transactions. If the company was truly profitable, it could consider alternatives like on-market buybacks, capital returns or accretive M&A.

2. This is another way of saying "we want to raise capital but don't want to hurt the share price"

3. Delisting makes it even harder to sell shares, contradicting the liquidity concern

4. Cost savings from delisting is indeed a valid point

The proposed delisting schedule indicates the stock will be suspended on July 15 and removed from the ASX by July 17. Interestingly, insiders including CEO Prent Kallenberger and two non-executive directors, have been buying shares on-market. This raises the question: What motivates these insider purchases so close to the delisting date?

Top Explorer Sells

Spartan Resources has emerged as one of the year's biggest gold success stories, with its stock soaring over 380% in the past twelve months. This impressive performance is largely due to the exploration success at its Never Never gold deposit, which has emerged as one of Australia's highest-grade gold discoveries.

The strategic importance of Never Never is highlighted by its proximity to Ramelius Resources. Ramelius faces a projected decline in production, from 239koz in FY25 (forecast) to 115koz by FY29. In an apparent move to mitigate this downturn, Ramelius has increased its stake in Spartan from 8.92% to 17.94% as of July 2. Despite this substantial investment, Ramelius has stated it has no plans to acquire control or make a takeover offer.

Spartan's Chief Executive Simon Lawson has recently made four separate on-market sales, totaling nearly $3 million or approximately 3.5 million shares. However, Lawson still retains a significant holding of 11.7 million shares.

Top Tech Buys

GTN is one of the largest supplier of traffic information reports to radio stations in the UK, Australia, Canada and Brazil. It's financials and balance sheet are quite intriguing for a $90m market cap company.

• FY23 revenue up 10.6% to $177.0 million but net profit down 6% to $2.6 million

• FY23 net cash position of $3.4 million (cash balance of $30.6 million but $24 million debt)

• Half-year FY24 revenue up 5%to $94.8 million and net profit up 46% to $4.4 million

• Half-year FY24 report noted net debt of just $0.5 million and $23.6 million cash

• Half-year FY24 report declared interim dividend of 1.1 cents per share

• Latest trading update expects FY24 revenue between $185-187 million

Non-Executive Director Craig Coleman commenced his role last month and purchased an outsized $1.87 million worth of shares. This represents the company's first insider buy since September 2023.

Top Tech Sells

Catapult Group's Non-Executive Director Igor Griendt has been selling shares at an unprecedented rate. Mr Griendt, who previously served as the company's COO and CTO before transitioning to his current role in July 2019, has divested approximately 700,000 shares ($1.3 million) since June. Despite this significant sell-off, he retains a substantial stake of 19.8 million shares.

This selling activity follows an impressive FY24 result, released on Thursday, May 30. The company's shares surged by approximately 25% following the announcement, as analysts hailed the results as a milestone for the company. The report highlighted strong revenue growth and, notably, positive free cash flow. Key performance indicators, including Annual Contract Value (ACV) and revenue, surpassed expectations, largely driven by robust performances in both the wearables and video segments.