Insider Trades: The director who sold 44% of his stake in Nick Scali

Welcome back to the Insider Trades Series – A summary of on-market ASX 200 director transactions valued at more than $10,000 that have taken place between 9 and 16 February 2024. We're beginning to see a few post-earnings trades pop up, with directors mainly selling into strength and buying into weakness.

Large Cap Insider Trades

Nick Scali Non-Executive Chairman John Ingram sold approximately 44% of his holdings just four days after the company's bumper half-year result. Ingram has held a position on the Board since April 2004.

Nick Scali's first-half FY24 earnings showcased a clean sweep of numbers including better-than-expected sales, margins and net profit.

• Net profit fell 29% year-on-year to $43 million but 5% ahead of Macquarie expectations

• The net profit beat reflected higher gross margins, group sourcing benefits and lower freight costs

• Gross margins came in at a record 65.6%, around 160 bps ahead of Macquarie estimates

• January 2024 written sales were up 3.6% compared to last year and like-for-like sales up 2.6% over the same period

"Record high gross margins and growing sales momentum led to a 5% NPAT beat in 1H24. We see considerable runway for further store roll-out, Plush refurbishment and optimisation to support sales over the medium-longer term," Macquarie analysts said in a note on 6 February.

Nick Scali 12-month price chart (Source: Market Index)

Strike Energy lost 25% of its market capitalisation on Tuesday, 13 February after its South Erregulla-3 well unexpectedly failed to flow. But things have gone from bad to worse, with the stock down another 28% today following a vague update about its South Erregulla-2 well. In the past six trading sessions, Strike Energy shares have almost halved.

Non-Executive Chairman John Poynton bought the dip at 30.5 cents vs. its current share price of 22 cents. Interestingly, this represents the company's first on-market buy since March 2022.

Strike Energy 12-month price chart (Source: Market Index)

Pro Medicus delivered a first-half result slightly below analyst expectations. There was no room for error given its expensive price tag and its almost 20% year-to-date rally heading into results. The stock was sold off heavily, down as much as 20% over the next two sessions. Non-Executive Director Alice Williams purchased her shares near recent lows, at $90.04 vs. $93.91 on Tuesday afternoon.

The outlook for Pro Medicus remains positive, with the results highlighting a strong start to the year and expectations for stronger revenues in the second half of FY24. The pipeline across all market sectors is still viewed as robust and the company's customer volume growth outpaces the industry. Valuation remains a concern among some analysts. The average price target across 10 sell-side ratings was increased 0.7% after the result to $95.25.

Market Index recently spoke to Pro Medicus Co-founder and CEO Dr Sam Hupert about the half-year result. You can check out the interview here.

Pro Medicus 12-month price chart (Source: Market Index)