The Qantas Airways Limited (ASX: QAN) share price has risen by around 15% over the past month, significantly outperforming the S&P/ASX 200 Index (ASX: XJO), which has only gone up by approximately 1% over the same time period.
Despite the rapid rise of Qantas shares, the Qantas Chair recently decided to make a significant investment.
It's nearly always a good sign when leadership figures make investments in their own businesses because it suggests they believe the share price is at a good value and that the business has a good long-term future.
When a sale occurs, investors often worry that bad news may follow. We often witness a drop in the share price following a disappointing trading update or other negative developments.
That's not the case here, though.
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Chair makes big investment
According to the announcement to the ASX, the Qantas Chair John Mullen bought 70,000 Qantas shares on 20 September 2024.
This investment was done at a price of $7.31 per share, which is actually slightly higher than where it is right now – it's 1% higher than the current level.
This means the Qantas Chair John Mullen invested approximately $512,000 into Qantas shares on the market for what appears to be his self-managed superannuation fund (SMSF).
These are the only ordinary Qantas shares that Mullen owns. He was appointed to the Qantas board in April 2024 and became the chair of the Qantas board on 16 September 2024.
What next for Qantas shares?
In the 2024 financial year annual report, the former chair of Qantas, Richard Goyder, said:
The past year has seen an accelerated pace of renewal at both the Board and Senior Management level.
New CEO Vanessa Hudson has brought to the role a thoughtful, open-minded approach and is resetting the leadership culture of the business. I am confident that she has the right experience, personal qualities and vision to lead the Group through its next exciting chapter.
Supporting her is a largely refreshed leadership team, with a mix of external and internal talent appointed to lead key business units.
…While there will be challenges ahead, I firmly believe that Qantas is putting the right pieces in place to succeed for the long term.
With two world-class brands in Qantas and Jetstar, an airline loyalty scheme that is second-to-none, a growing freight business, a strong balance sheet, a passionate workforce, and a pipeline of investment that will ultimately change the way Australians connect with each other and the world, the foundations are strong.
The broker UBS currently has a price target of $7.95 on Qantas shares, which implies a possible rise of around 10% over the next year. UBS suggests the market is still not pricing in the new normal of the earnings, according to the broker.
