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Once described as ‘inhospitable and unsuitable for the agriculture which would be needed to sustain a settlement’ ( Willem de Vlamingh, 1697), Perth Western Australia yesterday was the latest city to boast a Tiffany store.
Is this a sign of the peak in commodity prices and the global mining boom?
(The thoughts of a ‘aren’t commodities cyclical’ cynic)
Griffiths
Martin Griffiths, CFO of Stagecoach (SGC 275p) is taking his money off the table.
As at the beginning of June he held Executive Share Options over 479,000 shares, with varying exercise periods, starting in June and December 2006 and December 2007, and extending mostly to June 2010, with some as far out as December 2011 (Annual report).
Griffiths exercised all 479,000 between 26th of June and 8th July this year, which cost him £365k.
He sold all of them them on the same dates, realising £1379k, a net £1m in his pocket.
Why do I think this significant?
- He had another 2-3 years before he needed to exercise these options, but chose to exercise and sell now.
- This 479,000 shares is the total amount in his Executive Share Option pot*. Griffiths today owns less than 20,000 shares.
- When exercising options, directors usually sell sufficient to pay the tax man and hold on to the rest. Not in Griffiths case. He has exercised and sold the lot.
Griffiths behaviour and the subsequent risk profile of his remaining ‘Plan’ shares indicates to me that the risks to the Stagecoach shares outweigh the medium term returns. So I’d follow Griffiths and take some money off the table too.
*Griffiths also owns 166,000 in the Executive Pension Plan (vestable mid ’09 and mid ’10), and the equivalent of 675,000 in the Long Term Investment Plan, but these are subject to Total Shareholder Return criteria as detailed in the Annual Report, and designed to be taken in cash not shares, so you may not find out whether they have been exercised until the next Annual Report.
References:
Stagecoach Annual Report 2008, pp 35-38
In my post of March 6th: ‘3i CEO Philip Yea buys back £1/2m worth of shares’ I commended Philip Yea for his expertise in trading in his own company stock, 3i.
Note now that on July 14th Yea sold 60,831 shares at 823.5p, taking £500k off the table, leaving him with a residual 275,000 shares.
From March 6th to date 3i (III, 930p) are up 22% relative to the FTSE 100.
Time to take profits then. Thankyou Philip.
