Jason Kotchoff, creator of investment app StockLight.

By law, company directors are required to disclose to the Australian Securities Exchange whenever they buy or sell shares in their own companies.

The problem is, these announcements are often difficult to interpret, confusingly worded, and buried in PDF documents where most are unlikely to see them.

StockLight, an investment research app created by software developer Jason Kotchoff, has brought together all of this previously public, but difficult to collate, information into a single feed.

Importantly, he’s created an algorithm that automatically calculates the value of the shares bought and sold, and the director’s total take in their company.

For example, on 9 September, Martin Gerard Monro sold $134,000 worth of shares in construction company Watpac Ltd (WTP) — more than 60 per cent of his holding — bringing his total stake $88,400, or 0.057 per cent of the company.

Last last month, Norman Ross Adler sold down 8 per cent of his shares in Domino’s Pizza Enterprises Ltd (DMP) valued at $391,000, leaving him with $7.9 million worth of shares equating to a 0.23 per cent holding.

And on the flip side, Sydney Roosters chair Nicholas George Politis recently bought up $13,200 worth of shares in automotive group AP Eagers (APE), which he also chairs. He holds more than $700 million worth of shares in the company, with an ownership stake approaching 40 per cent.

Mr Kotchoff, a former Silicon Valley tech who helped developed Yelp competitor Insider Pages before its acquisition by internet giant IAC in 2007, is quick to stress he makes no commentary or interpretation of the data.

… and sells.Source:Supplied

Keep track of buys ...Source:Supplied

Nevertheless, he says it’s incredibly valuable information for retail investors. “When a company director has a large insider ownership of a company, you could assume that the success of the company will directly benefit that director,” he said.

“Directors of ASX-listed companies will know more about that company than anybody else, and so you have to assume that when they make decisions to buy into their own companies, in many cases that will be a good sign.”

But company directors also buy and sell shares for all sorts of reasons.

“They’re people too, they’ve got mortgages, homes, kids and holidays to think about,” Mr Kotchoff said. “So sometimes these transactions are going to have nothing to do with the health of the business.”

Australian Shareholders’ Association chairman Diana D’Ambra agreed it could be useful information for retail investors. “People use it to look for signs,” she said.

“If they’re buying out or selling in, is that a good thing? It’s probably not unhelpful, but there are other ways to get that information. The fundamental difference is pushing it through to the investor, rather than them having to go and read the announcements.”

The StockLight app, which uses data from Intelligent Investor, automatically extracts information from the ASX announcements, which is then “sanity checked” by a human before being pushed out as a notification.

“I know personally a number of analysts who look at this information and use it to determine research they provide to their retail investors,” Mr Kotchoff said. “At the moment they go through and read every single ASX announcement and make the calculations manually.”

The app works on a freemium model — users can download and use the basic functions for free, but must pay an $11 a month subscription through the App Store to use the more in-depth features.

StockLight also acts as a lead-generation service for Intelligent Investor, earning a commission if a user signs up for the research provider.

Mr Kotchoff said it had been downloaded more than 50,000 times and had a highly engaged active audience. He said it differs to brokerage apps in focusing on high-quality research.

“Brokerage apps issue buys and sells, and before you know it the sells become buys and the buys become sells. They have a stated mandate of increasing trading volume for their brokerage service, because that’s how they earn their commission.”

frank.chung@news.com.au