Director Deeds: Counting sheep and shares

Since the tail-end of April – until yesterday – the market was trading in a tight range. Although May has seen little market play to date, there has still been some solid buys and sells, and we are still yet to see the full impact of Monday’s turn in terms of director transactions. It may have created opportunity. Stay tuned.'

In this instalment of Director Deeds, Accent Group measures up to have the biggest footprint, in terms of transaction size. Chairman David Gordon stamped his place when he sold $6.32 million worth of stock in late April at around $1.58. Not a way to get street cred for the streetwear-footwear retailer. Despite being a retailer at a tumultuous time for the sector, Accent Group has in fact outperformed, which may have incentivised the sale. Determined by company-owned stores alone, Accent Group lifted its net profit after tax by 27.3 per cent in the half year just gone. And just when you thought Accent Group had cracked the code to retail success, through its ‘no lazy retailing’ strategy which removes discounting and focuses on sustainable sales, the chairman goes ahead and sends this message. Gordon reduced his stake by 60 per cent through the sale, now holding 2.6 million shares.

Staying on that consumer beat, Peter Polson of IDP Education sold more than $275,000 worth of shares in the international student placement company. IDP Education is headquartered in Melbourne but helps students, primarily from Asian countries, get placements in Australia, New Zealand, Ireland, Canada and the US and UK. IDP’s share price has been pushing on record highs this year. The company makes most of its money from English language testing, for which it provides a certification – and benefits more from several 'fails' than first-go 'passes' – growing this business line in double digits last year. There's something about May, the lead-up to end of financial year, with Polson last having sold in May 2017.

Moving on up to commodities, where not a single noteworthy director sale filtered through to Director Deeds. But there were several buys. Magnis Energy’s Marc Vogts spent over $130,000, Consolidated Zinc’s Stephen Copulos more than $75,000, and Galaxy Resources' John Turner over $50,000. 

Nanosonics, a stock with a lot of hype and the share price rise to match, received a sell order from non-executive director David Fisher, who dumped around $200,000 worth of stock in the infection control specialist. InvestSMART cut the stock loose recently too, after a stellar run where the share price rose more than fivefold. A next-generation sterilisation device has pushed Nanosonics to beat the market, but that’s notwithstanding the fact that Nanosonics is trading at very optimistic levels, on a blown-out price-earnings ratio. Fisher sold that parcel on April 26, a fortnight after Nanosonics reached an all-time high. Nanosonics has also been on a tear developing new products, having recently reported a 59 per cent rise in sales.

We saw quite the opposite occur with this next healthcare company. Alcidion Group, an informatics solutions provider, reported taking $6.2 million in cash receipts last quarter, up from $4.1 million the quarter prior. Investors knew Alcidion was onto a good thing, driving momentum to push the share price up to 40 per cent higher over the quarter. Alcidion also has ample cash now to avoid a capital raising, said management in April. It received a wad of cash from a new UK contract, which will earn revenue over the next five years. Kate Quirke seems optimistic, as she draws on her years of experience working in IT procurements and implementations in the space across Asia Pacific. Quirke tipped in another $170,000-plus on April 26 not too long after Alcidion posted up its latest quarterly. She has been a buyer since the second half of last year, now holding about 4 per cent of all company shares. 

On the surface, it would seem Chris Richards’ Apiam Animal Health competes head-to-head with Glen Richards’ Greencross, but they aren’t all too related, nor is the more recently formed NVC Limited. This veterinary group is born and raised in the barnyard, with Richards starting the business with a focus on swine in the late 1990s. Apiam, originally the Chris Richards Group of Companies, now serves livestock in need of care, and is therefore tied to agribusiness, not really retail. Despite that, Apiam has been out of favour with the market, languishing to 52-week lows last month, which happen to also be all-time lows since the stock listed three years ago. Dry conditions tend to affect the business, as its clients are faced with skyrocketing water prices and less money for feed. Apiam owns more than 40 clinics throughout Australia, but is expanding into international markets, and is also planning to expand into the pet market by purchasing regional clinics. However, its big push is with China sheep breeding facilities, where sheep is classified as a growing meat market (although it currently only makes up around 3 per cent of the protein consumption for Chinese), and semen and embryo export sales. Australian Super has also been selling down its stake in the stock for a little while. Richards participated in the dividend reinvestment plan, to the tune of $230,000, along with three other insiders. He holds nearly 28 per cent of all Apiam shares on issue.

As the business gears up for a brand refresh, Vladimir Mitnovetski, listed as its divisional officer, spent over $230,000 on shares in Dicker Data. Currently it’s a hardware distributor that’s gone under the radar to those outside the industry while distributing tier-one products from tier-one tech companies such as HP, Cisco and Microsoft for more than 40 years. Despite the claim that software is eating the world, and hardware basically billed as the entre in that specific scenario, Dicker Data has consistently grown its revenues over the last few years, recently more than 10 per cent, and it just notched up 20 years of profitable growth. In terms of market share, it’s the third-largest of its kind, after Ingram Micro and Synnex. It focuses on getting pre-sales from SMEs, and the impetus now seems to be better placed on ‘behind-the-scenes’ tech, one recent example being Dicker Data’s signing of Kaspersky internet security this month, an anti-virus company based in Moscow. Dicker Data is clearly trying to become more client-facing, and shareholder-friendly it would seem. The company recently confirmed it will up its dividend by 22.2 per cent on the year, to 18c per share, and only about a month later came this purchase from Mitnovetski, amid a market pullback. Dicker Data shares something in common with Apiam Animal Health – Australian Super is a substantial holder.

For a full run-down on what directors behind ASX-listed companies are doing behind the register, click here.

For extended research on the companies behind Director Deeds, click here.