Chiefs lead $39m selling spree

SELLING by a clutch of executive directors again dominated trading on the directors' trades front.

By InvestSMART · 15 Sep 2012

By InvestSMART ·
15 Sep 2012

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SELLING by a clutch of executive directors again dominated trading on the directors' trades front.

The scorecard registered $3.7 million to about $39 million in favour of selling.

Managing directors such as Colin Goldschmidt from Sonic Healthcare, Gregory Roebuck from carsales.com and Grant King of Origin Energy did some on-market selling.

Goldschmidt and Roebuck did some mighty profitable option-exercising at $7.50 and $2.65 respectively and selling shares at $13.22 and $7.46 respectively. Nice going.

Thomas Pockett, the numbers man at Woolworths, also got into the act but he had to make do with exercising paper at $25.91 and selling at an estimated $29.30.

It's an estimate because Pockett chooses not to disclose what price he sold at, preferring "market value". He sold to pay the exercise price of the options and tax.

Elsewhere on the selling front, two directors of salary packager McMillan Shakespeare decided to pocket some profits and there are aplenty for the group's followers: the scrip is up sixfold since the end of 2008. Chairman Ronald Pitcher collected close enough to $1 million, while non-executive director John Bennetts raised nearly double that.

Recently Anthony Podesta, the group's founder, sold $46 million of stock.

Elsewhere, there was some useful buying of larger industrial stocks.

Rarely does anyone from the CBA boardroom buy ordinary shares in the bank but Andrew Mohl did just that. The former ANZ Bank and AMP heavy now sits on $3.3 million of stock.

Boardroom colleague Jane Hemstritch preferred paper in the form of PERLS III, and outlaid $233,350.

Elsewhere, Graeme Liebelt, a relative new boy on the Amcor board, increased his stake threefold, outlaying about $171,000.

And let's not forget one Bruce Parncutt, who made a rare appearance on the table.

He added to his stake in Acrux, which specialises in drug products administered through the skin.

Nicholas Politis keeps picking up AP Eagers shares, while distinguished author and funds manager Matthew Kidman opened his account in Centrepoint Alliance.

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Frequently Asked Questions about this Article…

What was the main trend in the recent directors' trades scorecard and how much selling took place?

Selling dominated the directors' trades scorecard, which registered about $3.7 million versus roughly $39 million in favour of selling — a clear bias toward insiders selling stock during the reporting period.

Which executives exercised options and made profitable sales (option exercising and insider selling)?

Notable option exercising and subsequent sales included Colin Goldschmidt of Sonic Healthcare (exercised at $7.50, sold at $13.22), Gregory Roebuck of carsales.com (exercised at $2.65, sold at $7.46) and Woolworths' numbers man Thomas Pockett (exercised at $25.91 and sold at an estimated $29.30).

Why did Woolworths executive Thomas Pockett sell shares after exercising options?

According to the article, Thomas Pockett sold shares primarily to pay the exercise price of his options and to cover tax. He chose not to disclose the exact sale price, reporting only the 'market value,' so the $29.30 figure is an estimate.

What big insider sales took place at McMillan Shakespeare and what context did the article give?

Two directors at salary packager McMillan Shakespeare sold shares to realise profits: chairman Ronald Pitcher collected close to $1 million and non-executive director John Bennetts raised nearly double that. The article notes the company's scrip is up sixfold since the end of 2008, and founder Anthony Podesta recently sold about $46 million of stock.

Were there any notable director purchases or increases in stakes reported?

Yes. Andrew Mohl bought ordinary Commonwealth Bank (CBA) shares and now holds about $3.3 million of stock; Jane Hemstritch bought PERLS III paper for $233,350; Graeme Liebelt increased his Amcor stake threefold, spending around $171,000; Bruce Parncutt added to his Acrux holding; Nicholas Politis continued accumulating AP Eagers shares; and Matthew Kidman opened a position in Centrepoint Alliance.

Is it common for Commonwealth Bank (CBA) board members to buy ordinary shares?

The article says it is rare for anyone from the CBA boardroom to buy ordinary shares, making Andrew Mohl's purchase of ordinary CBA stock notable.

How did option strike prices compare with sale prices for directors who exercised options?

In the examples given, directors exercised options at materially lower strike prices than the subsequent sale prices: Goldschmidt at $7.50 sold at $13.22, Roebuck at $2.65 sold at $7.46, and Pockett exercised at $25.91 and sold at an estimated $29.30 — demonstrating the immediate profit some directors realised from option exercising plus selling.

Which companies mentioned in the article had active insider activity that everyday investors might want to watch?

The article highlights insider activity at Sonic Healthcare, carsales.com, Origin Energy, Woolworths, McMillan Shakespeare, Commonwealth Bank (CBA), Amcor, Acrux, AP Eagers and Centrepoint Alliance — covering both notable selling and some buying that could be of interest to everyday investors monitoring directors' trades.