Hi Octogenarian,
Directors buying/selling is always worth watching with no guesses which one we prefer! Often selling can be harmless especially around tax implications but as we saw this year with DroneShield (ASX: DRO) it can have a devastating impact on a share price if the markets sniff underlying issues at play.
Regal Partners (ASX: RPL) insiders have been net sellers over the past year, with the key transaction being Phil King’s ~$54m selldown around $2.16. That is below the current ~$2.52 share price, which is never an ideal signal, although the context matters: While the sale represented ~42% of King’s holding, he remains a major shareholder with meaningful skin in the game.
More recently, CEO Brendan O’Connor sold ~$1.5m worth of shares at an average price of $2.64. Again, not ideal, but the sale accounted for just 7.4% of his holding, making it hard to read as a major vote of no confidence.
Across the past year, insiders bought ~$543k of stock but sold around $62m, so the flow is clearly skewed to selling. However, insiders still own roughly 24% of Regal, worth about $226m, which remains encouraging.
MM’s View: the insider selling is a modest negative and worth monitoring, particularly given the scale of King’s sell down, but it is not a clear red flag while insiders continue to hold a substantial stake in the business. Funds management businesses are reasonably simple to understand. Performance and FUM flows drive valuation, and RPL now has a nice mix of uncorrelated strategies and asset classes within their stable, which we like.
