Heavyweights seize on market jitters to top up shareholdings

With an increasing number of company results surfacing, directors top up their stakes.

By InvestSMART · 20 Aug 2011

By InvestSMART ·
20 Aug 2011

Comments

With an increasing number of company results surfacing, directors top up their stakes.

WITH an increasing number of company results surfacing, directors of a clutch of heavyweight industrials have topped up their stakes.

Bruce Ballantine Teele, the chairman of Australian Foundation Investment Company, once again made an appearance. The former House of Were chief has been through many a market downturn and he continues to buy in this roller-coaster equities market.

He recently bought 163,000 shares at $4.19 each, followed that with 37,000 shares at $4.11 and then 50,000 shares at $3.95 on August 9 - the day the market fell 5.6 per cent.

Mr Teele collected the 13?-a-share final dividend the stock closed yesterday at $4.08 - without the dividend.

Elsewhere, the three Telstra musketeers - Catherine Livingstone, Nora Scheinkestel and Russell Higgins - did what they did in February, which was to buy stock soon after the release of the company's results. Averaging up, they paid about $3.04 a share, compared with about $2.93 in February.

Meanwhile, the overall scorecard registered $74 million to $2.3 million in favour of sellers, with two of the founding directors of Cellestis taking a big hand in proceedings.

Normally takeover transactions are excluded from the table but two personal share sales in the TB diagnostic group made it in this week.

Cellestis is being taken over by Netherlands-based Qiagen, and Cellestis managing director Anthony Radford and chief scientific officer James Rothel have each collected $34 million proving they're no ordinary boffins.

Investors who have held on for the past decade or so are looking at gains of about 29 per cent compound a year. Handy enough.

Among other sellers, five directors of Crusader Resources did some mighty profitable option exercising and selling. They exercised options at around 25? and sold shares for about $1.30.

Other stocks making repeat appearances on the buying list were AP Eagers, Transurban and Gujarat NRE Coking Coal. Share-buying notices by Gujarat directors filed in recent weeks with the stock exchange suggest the price of shares bought is now an optional requirement. The notices showed ''on market purchase'' as the consideration.

Cochlear has attracted some interest from directors recently: Edward Byrne paid $71.86 a share, while last week Rick Holliday-Smith paid $65.57 and Donal O'Dwyer paid $65.77. This week, two substantial shareholders surfaced, Scottish-based Baillie Gifford and New York-based Manning & Napier Advisors. The fund managers have about 5 per cent each.

The reporter owns COH shares.

Go to Google News, then click "Follow" button to add us.

Share this article and show your support

Frequently Asked Questions about this Article…

What recent share purchases did Australian Foundation Investment Company chairman Bruce Ballantine Teele make?

Bruce Ballantine Teele bought multiple parcels of AFIC shares as company results surfaced — 163,000 at $4.19, 37,000 at $4.11 and 50,000 at $3.95 (the last purchase was on August 9, when the market fell 5.6%). The article also notes he collected the recent final dividend and the stock traded ex-dividend at $4.08.

Why did Telstra directors buy stock after results, and what prices did they pay?

Three Telstra directors — Catherine Livingstone, Nora Scheinkestel and Russell Higgins — bought shares soon after results were released, averaging about $3.04 a share. The article contrasts that with their earlier purchases in February, which averaged about $2.93, signalling they were ‘averaging up’ their holdings after the results.

What happened with Cellestis in the takeover and how did founders benefit?

Cellestis is being taken over by Netherlands-based Qiagen. Two personal share sales by founding directors were reported: managing director Anthony Radford and chief scientific officer James Rothel each collected about $34 million from their holdings as part of the takeover-related transactions.

Did the article show more director buying or selling overall?

The overall scorecard in the article registered $74 million to $2.3 million in favour of sellers, indicating that, on balance for the period covered, more value was sold by insiders than bought.

What director activity occurred at Crusader Resources?

Five directors of Crusader Resources exercised options and sold shares. The article reports they sold shares for about $1.30, showing profitable option exercising and selling by directors.

Which other companies showed repeat director buying and what did Gujarat NRE notices reveal?

Other stocks that repeatedly appeared on the buying list were AP Eagers, Transurban and Gujarat NRE Coking Coal. Notices filed by Gujarat directors recently showed ‘on market purchase’ as the consideration, which suggests the notices did not specify the exact purchase price and that price disclosure may be optional in those filings.

What director purchases were reported at Cochlear and who are the substantial shareholders?

Cochlear directors Edward Byrne, Rick Holliday-Smith and Donal O’Dwyer recently bought shares at $71.86, $65.57 and $65.77 respectively. The article also notes two substantial shareholders surfaced: Scottish-based Baillie Gifford and New York-based Manning & Napier Advisors, each holding about 5%.

What can everyday investors take away from these director buying and selling trends?

The article suggests directors often top up stakes when company results surface, which can signal confidence from insiders — but the scorecard still favoured sellers overall. It also highlights that takeover-related sales can produce large payouts for founders, and that long-term investors in some stocks have seen strong returns (the article cites about 29% compound annual gains for investors holding for a decade). Insider activity is useful information but not a guarantee of future performance.