I commented the other day that I believed eaga (EAGA, 124p) to be unloved, unknown and out of favour, but with directors buying prompting a ‘look again’ signal for investors (see post here).

Then I see that two days ago, Mark Tincknell, the Executive Chairman of Connaught (CNT, 396p) had been selling down his position in his company. He has sold 2 1/4 million shares, almost a third of his position, at 375p, to leave him with 1.3 million shares.

There are a couple of quotes I find rather amusing in the press release, namely that he sold shares ‘to satisfy institutional demand’‘. Well somebody had to be on the other side of the trade didn’t they !!

And then the release goes on to state that Mr Tincknell is ‘extremely positive about the future prospects of the company’. That may well be the case. But the fact that he is selling such a huge slug of his holding may also indicate that Mr Tincknell thinks that those future prospects are already discounted in the share price.

I know little of these companies save what I read on their websites. These lines are taken from their company overview pages:

Connaught: ‘Our Social Housing division has a community focus, fixing, maintaining and cleaning homes and neighbourhoods for local authorities and social landlords, and is one of the most highly respected players in the national social housing landscape. Our Compliance division specialises in gas, electric, water and fire compliance, and provides full health and safety and business risk assessments.’

eaga: ‘A leading provider of residential energy efficiency measures for utility companies under the Energy Efficiency Commitment (EEC), and a large and rapidly growing supplier into the social housing sector.’

I see a similarity in customer bases, but with a slightly differing product.
Then I look at the financial data as provided by Digitallook.com.

Company: …………………………………………Connaught ……………eaga

Mkt cap £m ………………………………………485 ……………………..306

Turnover £m ……………………………………..400 …………………….482 (both last reported finl year)

Net cash flow from operating activities £m 9.75 …………………33 (both last reported finl year)

Share price ………………………………………. 396p …………………..124p

eps (last reported finl year/forecast) … 12.2p/17p ……………12.27p/10.6p

And I leave you to make your own conclusions. All I can add is that this would be a long term trade, as it will take 2+ sets of results by eaga to change investors opinions.