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4 Feb 2017 (AFR) – ‘Banner year’ for insider selling as directors dodge corporate disasters

[COMMENT: In many cases where someone inside a company is selling their shares because they know “something”, or a substantial shareholder is selling down their holding for a good reason, the average investor won’t have the same information at hand, but they can still be alerted to the selling by studying the share price performance. The start of a downtrend in share price can be a good hint that something is not right. This can be followed up by searching the company filings for “Appendix 3Y – Change of Director’s Interest Notice” documents, or “Form 605 – Notice of ceasing to be a substantial shareholder” documents. Profit warnings can also confirm the potential gloom and explain the falling share price. Of course, being able to interpret the stories in the price charts certainly helps.]

(4 February 2017, AFR, p17, by Jonathan Shapiro)

Bellamy's - down‘As six of Australia’s worst-performing listed companies lost $11 billion in value in just six months, well-timed sales by “insiders” helped them avoid the sharp falls that followed profit warnings, downgrades and other corporate disasters. Significant insider selling was evident at the four worst-performing companies in the S&P/ASX 200 over six months and four out of the 10 worst-performing stocks in the S&P/ASX 100 Index over that period, as Aconex - downdirectors and management were spared losses by the good timing of their sales.’

‘In total nine executives and directors sold shares in Aconex, Sirtex Medical, Bellamy’s Australia, Vocus Group, Healthscope and Brambles worth about $60 million since late August. These shares would now be worth just $32 million as of this week.’

Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

Read more about Technical Analysis – how to understand the stories in the price charts.

 

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Brainy's Share Market Toolbox. Read the honest truth about the sharemarket. Develop or fine tune your investing/trading strategies using share price charts (technical analysis), or learn about the investment strategies of others. Melbourne (Australia) based - supporting share market investors and traders to build wealth through smarter investing using my Share Market Toolbox arsenal of weapons to tackle the market.

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