When a company engages in a share buyback, it's often seen as a bullish sign that the company believes its shares are undervalued. When company directors personally buy back shares, this signal is amplified.
Directors using their money to buy back shares also gives them skin in the game and an additional incentive to make better decisions on behalf of other shareholders.
Here are two ASX 200 companies whose directors have recently bought up a significant sum of shares.
Kelsian Group Ltd (ASX: KLS)
Kelsian Group provides public transport utilities in Australia. It owns brands such as SeaLink Marine & Tourism and bus operator Transit Systems Group.
Shares of the ASX 200 company have taken a beating over the past year, as they're down around 38%.
But this hasn't deterred Kelsian Group's non-executive director Neil Smith from buying copious amounts of shares. Smith purchased 300,000 shares on Monday for a weighted average price of $5.47 per share. His investment on the day totalled roughly $1.64 million.
Some clues as to why Smith bought Kelsian shares could be found in its full-year results for FY22.
The company's top and bottom lines surged during this reporting period, with earnings before interest, taxes, depreciation, and amortisation (EBITDA) up 9.3% year over year (yoy) to $183.1 million and total revenue up 12.9% yoy to $1.32 billion.
Kelsian CEO Clint Feuerherdt commented on the ASX 200 share's trajectory for the future, stating:
Kelsian is well placed to continue to grow both domestically and internationally with a continued focus on delivering against our growth initiatives and environmental factors continuing to ease, primarily migration and international mobility. Further, domestic tourism is expected to continue the positive trajectory seen since the 2022 Easter period and we anticipate a gradual return of international travel demand.
Iress Ltd (ASX: IRE)
Iress develops software for the financial services industry. Its main operating segment lies in the Asia Pacific region.
Iress's shares are down around 16% over the past year.
One director from Iress has seemingly seen an opportunity in the sell-off of the ASX 200 company's shares. Yesterday, Iress non-executive director Marcus Price bought 27,272 shares for a total consideration of $300,321.
Iress reported a lift in its underlying net profit after tax (NPAT) as part of its results for 1HFY22, which was announced on 18 August.
NPAT increased 29% to $31.8 million, while revenue also saw a slight bump of 6% to $306.4 million.
Looking ahead, the company expects its profit to be between $177 million and $183 million, representing an increase of 7% to 10%.
