Insider Trades: Who’s buying their own stock on the back of FY23 results?

Welcome back to the Insider Trades Series. We’re already seeing a pickup in trading activity by ASX 200 directors in the wake of the FY23 results. The scale of the buying is far smaller than for the selling made during the same period (which is discussed here.)

The data below observes on-market ASX 200 director buys valued at more than $10,000 between 23 August and 28 August 2023.

Top ASX 200 director buys

Most of these companies saw their share prices rise during the period in question, with a couple of exceptions including Telstra and Cleanaway.

The pair of $100,000 stock buys, from Tabcorp Holdings chief executive Adam Rytenskild and chairman Bruce Akhurst followed a mixed set of results for FY23. Their transactions also came ahead of an important decision for the wagering and gaming company, which is expecting a decision on its Victorian wagering licence next month.

Tabcorp Holdings (ASX: TAH)

• Results day and share price move: Thursday 24 August +4.29%

• Results recap: The wagering company’s FY23 result delivered one beat, two misses on analyst expectations as NPAT and revenue undercut consensus.

• Broker views: Macquarie said: “We see Tabcorp as fair value, balancing downside risks within wagering and possible upside from the Victorian wagering licence outcome.” Retained Neutral rating and price target of $1.15.

• Food for thought: After the initial jump, the share price retraced the gain and was down 8% by the time the market closed on Friday 25 August but is now back to the level it hit on the day of the result, closing at $1.10 on Thursday 31 August. The market is now eagerly awaiting the outcome of the Victorian wagering licence process, which is expected to conclude in October.

Tabcorp’s 6-month share price (Source: Market Index)

Cleanaway Waste Management (ASX: CWY)

• Results day and share price move: Thursday 24 August -4.14%

• Results recap: Cleanaway reported FY results that were largely in line with broker expectations, with a slight beat at the top line (revenue of $3.56 billion versus consensus of $3.42 billion) and a miss at the bottom (underlying NPAT of $148.6 million versus the $150.9 million analysts were looking for).

• Broker views: JPMorgan maintained OVERWEIGHT but lowered the price target to $2.95 from $3.

• Food for thought: Management used the earnings announcement as an opportunity to release a three-year earnings target of $450 million – this is at least a 50% increase on last year, but is largely in line with what brokers anticipate (consensus is looking for $460 million). After the initial share price fall, the stock gained back more than 3% by Wednesday’s close and ended Thursday at $2.62. Cleanaway currently trades 6.7% below the 12-month high point of $2.82 it hit in mid-June.

Cleanaway’s 12-month share price (Source: Market Index)

Telstra (ASX: TLS)

• Results day and share price move: Thursday 17 August -2.82%

• Results recap: The telco reported another period of solid growth and positive progress on its T25 strategy. Key financial results included total income of $23.1 billion, up 5.4% versus the $23.4bn expected by analysts and reported EBITDA of $7.9 billion, in line with consensus.

• Broker views: Morgans said: “Achieved a return above its cost of capital, few others in the sector have; potential for growth in InfraCo if free cash flow can grow at a mid-teens compound annual growth rate; Divestment of InfraCo assets seems unlikely, although still possible; Optimism about the potential of AI-requiring infrastructure such as InfraCo Fixed.” Downgraded to HOLD from Add and lowered PT to $4.20 from $4.70.

• The market disappointment has been attributed largely to the fixed enterprise’s underperformance, a segment that felt the pinch of price pressures. While the mobile business showed resilience, declines from other areas weighed on overall earnings.

• Food for thought: The share price fell further in the days following the result, dropping another 3.8% to close at $3.97 on 21 August. Telstra’s stock traded at $4.01 at the market close on Thursday 31 August.

Telstra’s 12-month share price (Source: Market Index)