Dicker Data (ASX: DDR) Directors Continue To Buy Shares

While this article focuses on the share market during the pandemic, it in no way seeks to minimise the very real human tragedy that is occurring.

The Australian-owned and operated IT distributor Dicker Data (ASX: DDR) reported more director buying to the ASX this morning. Co-founder David Dicker purchased just shy of $200,000 worth of shares on-market. This is in addition to his purchase of $239,000 worth on Monday, bringing his total holding to a value of some $259.75 million. The company COO, Vladimir Mitnovetski, also added $39,000 worth to his multi-million dollar holding this morning.

The latest move follows a string of director buy-ins this month. Co-founder Fiona Brown purchased $3.63 million worth of shares at $6.89 on 2 March, well above the current price of $4.39.

Total director purchases this month amount to approximately $4.92 million. David’s purchases in March have been his first buy-ins since August 2015.

High trading volumes for Dicker Data this month

These moves from the directors follow the release at the end of February of the company’s CY 2019 financial report. The report announced further revenue growth from the company’s principal business of hardware distribution, as well as sharp growth in software earnings, which now amount to 20.8 per cent of total revenue.

The company increased its dividend from 20c to 27c in FY 2019. Dicker Data has a longstanding commitment to pay 100 per cent of after-tax profit to shareholders in dividends. This creates a strong alignment between the interests of shareholders and management. So while there is no doubt that Dicker Data faces risks in the current environment, the recent buying certainly underlines the strong alignment between the board and shareholders. 

It’s hard to know what impact the coronavirus pandemic will have on the company. In its initial phases, we would expect some short-term benefit as companies bulk up IT and software purchases to allow employees to work from home.

Christian Tym does not own shares in Dicker Data.

This post is not financial advice, and you should click here to read our detailed disclaimer.

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