You are currently browsing the daily archive for August 4, 2008.

On March 10th I warned, ahead of results, that the risk was on the downside for Savills (SVS, 221p). (See my comment here).

Since that date, Savills are down 37% in absolute terms, and down 27% relative to the FTSE 250.

Over the last few weeks however we’ve seen a bit of life come back to the Agencies (and property management and surveyors etc), in the form of director buying at Colliers Re (COL, 40.5p).

CEO David Izett has trebled the size of his holding by buying 100,000 shares at between 40p and 46p between 26/6 and 1/8.

Non exec Chairman Sir John Ritblat has increased his position in Colliers CRE by almost 50%, buying 300,000 shares at 46p to take him to a holding of 935,000.

These two directors have invested almost £180k between them. Not a huge amount, but the first indicator of value in a dead sector.


August 6th :

Further buying has been reported by Colliers CRE as follows

1/8 Non exec Chairman Sir John Ritblat has bought a further 250,000 shares at 40p, taking his holding to 1,195,000 shares.

4/8 Non exec Colin Wagman has bought 50,000 shares at 41p, a maiden purchase for him.

These purchases reinforce the positive case for the agents, and I expect Savills and Colliers to perform well from here.

Have a look at this article quoting some recent research by Digital Look.

They suggest that directors buys outweigh sells by 13:1, and believe this signals a likely rally in the UK market over the next three to six months.

Eric Daniels, CEO of Lloyds TSB Group (LLOY, 300p) has decided to step up to the plate by investing almost £300,000 of his own money in Lloyds shares.

Daniels on August 1st increased his position in Lloyds TSB by about 27% by buying 100,000 shares at 296.5p, taking his holding to 473,000 shares. For a great article on Daniels and Lloyds success in dire market circumstances read this article, published in the Telegraph today (link here).

Daniels colleague, Chairman Victor Blank, has invested roughly the same amount, buying 100,000 shares at 294p, increasing his position by 50% to 300,000 shares.

Despite Daniels making £2.7m a year (source : Daily Telegraph) I consider these moves to be significant, especially if Daniels is a ‘cautious’ individual. I would like to see more puchases, from Daniels and Blank, and hopefully other board members, to reinforce this signal.

At the moment the signal strength rates as MEDIUM.

It was reported to the London Stock Exchange that the Finance Director of BT Group (BT.A, 171.3p) Hanif Lalani, had bought 58,515 shares in BT at 170.90p, investing £100,000.

Although this increases Lalanis position in BT by more than 50% (to 169,812 shares) I view this move as being of little use as a signal to investors.

1. Lalani is acting alone amongst the board members in buying BT shares. A stronger signal would be generated by other board members buying.

2. £100k is not significant in the context of Lalanis income, and probably not in terms of his net wealth either. Hanif Lalanis income including benefits but excluding any ratchet on his deferred bonus plan amounted to £1,076,000 last year (source: BT 2008 annual report).

Following first half results which were better than expected ( see Questor article of 31/7 here), Rexam (REX 376p) directors have started to buy again.

Chairman Peter Ellwood has doubled his position to 20,000 shares, investing £38k at 380p. His colleague Bill Baker, and Executive Director of Rexam, has increased his holding by 20,000 shares to 194,000 shares, by investing £76k.

In mid December 2007 Rexam issued a profit warning which sent the shares down by 20%.

Eight directors of Rexam subsequently bought shares at between 410p and 435p, increasing their holdings by an average of 70% each. The shares rallied to 480p over the next five months, outperforming the FTSE by 20%.

For me to be convinced, I need to see the board of Rexam as committed now as they were back in December. These small purchases by Ellwood and Baker do not make the grade.

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August 2008