Guess which ASX 300 director just cashed in $2.3 million worth of company shares

This director just sold 44% of his shares…

| More on:
a man wearing a business shirt and pants reclines on a leather sofa with his laptop computer resting on his stomach as he looks concerned at what he's reading on the screen.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Whenever a director of an ASX 300 share sells a significant chunk of stock, it usually gets investors' ears up. But then the sum is $2.3 million? That's enough for all investors to pay attention.

That's what has just occurred over at ASX 300 furniture and homewares retailer Nick Scali Limited (ASX: NCK).

This morning, Nick Scali released an ASX notice that informed investors that its chair John Ingram has made a major stock move.

The filing informs us that Ingram made a large sale of Nick Scali shares between 8 and 12 February earlier this month.

Ingram offloaded a total of 156,551 shares over this period in on-market trades. That netted him a grand sum of $2.33 million.

This implies that Ingram achieved an average sell price for these sales of $14.88 per share.

Should investors be worried that an ASX 300 chair is selling shares?

No ASX 300 shareholder ever likes to see senior management of their company sell out of their stock. It's comforting for investors to know that the highly paid people running their business have significant skin in the game – that the financial fortunes of shareholders and management are one and the same.

But at the same time, ASX 300 management figures have financial obligations of their own. It's universally viewed as a poor financial practice to have the majority of one's wealth tied up in a single stock, even if it's one's job to help run that company.

As such, there are many legitimate reasons why an ASX 300 management figure can sell down shares of their own company that shouldn't bother shareholders. They could have a big tax bill, they might want a larger home or simply want to diversify their wealth.

It's hard to know what's going on in Nick Scali and Ingram's case though. The ASX filing shows that this was indeed a large sale of shares. Ingram offloaded 156,551 shares, leaving him with 200,000. In other words, in one fell swoop, Ingram has reduced his stake in Nick Scali by almost 44%.

Nick Scali shares on fire

A possible explanation is that Ingram is taking advantage of the recent surge in the Nick Scali share price. As recently as June 2023, Nick Scali was going for just $8.30 a share – almost half of what it is trading at today.

Since the company reported its latest (and well-received) earnings earlier this month, the company has jumped by an impressive 26.5% or so.

It's arguably likely that Ingram took note of this huge leap in value for his company, and decided that it was too good to pass up.

All in all, it's up to shareholders to determine whether Ingram's move is a red flag or not. I'd certainly be keeping an eye out for any future moves.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nick Scali. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Consumer Staples & Discretionary Shares

Young man sitting at a table in front of a row of pokie machines staring intently at a laptop. looking at the Crown Resorts share price
Consumer Staples & Discretionary Shares

Star Entertainment share price tumbles alongside sinking revenues

ASX 200 investors are pressuring the Star Entertainment share price on Friday.

Read more »

Happy couple doing grocery shopping together.
Consumer Staples & Discretionary Shares

Why it's a good day to own Woolworths shares

It could also be a good idea to keep hold of them.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Consumer Staples & Discretionary Shares

Why Goldman Sachs rates Wesfarmers shares as a buy

The leading broker is a big fan of this ASX giant.

Read more »

A woman shows a friend her new spiked heel shoes on a video chat.
Consumer Staples & Discretionary Shares

Guess which ASX 300 stock popped on major shareholder buying the dip

Drama has not put this shareholder off from adding to their position.

Read more »

increasing rural asx share price represented by happy looking sheep
Consumer Staples & Discretionary Shares

Are Elders shares a bargain following Monday's crash?

Has the market created a golden opportunity to buy shares in this 185-year-old business on the cheap?

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Consumer Staples & Discretionary Shares

Ansell shares jump 14% amid blockbuster acquisition

Ansell is making a big acquisition and it could be a big boost to its earnings.

Read more »

a woman smiles widely as she leans on her trolley while making her way down a supermarket grocery aisle while holding her mobile telephone.
Consumer Staples & Discretionary Shares

3 things smart investors know about Coles stock

Did you know these facts about Coles?

Read more »

a woman pushes a man standing in a shopping trolley pointing ahead far off into the distance.
Consumer Staples & Discretionary Shares

Have Woolworths and Coles shares been spared a break-up?

A review has rejected the notion of breaking up the supermarkets...

Read more »