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The three Executive Directors of Medicsight (MDST, 46p), an AIM listed company, have announced today their maiden share purchase since the group was listed in June last year at 110p.
‘On 11 August 2008, Executive Directors Tim Paterson-Brown, David Sumner and Allan Rowley collectively purchased 310,500 ordinary shares of the Company at an average price of 42 pence per share.’
None of these executive directors was previously a holder of Medicsight shares, though Paterson-Brown was reported to hold a 5% stake in Medicsights majority shareholder MGT Capital Investments (Medicsight 2007 Annual Report). They also own options over between 1 million and 1 3/4 million shares each exercisable between 50p and 110p. For details see the 2007 Annual Report.
Even though the $$ investment per director is under £50k, I consider this move by the three executive directors to be significant.
STRONG signal
Disclosure: I have a position in Medicsight shares.
Carnival yesterday August 11th announced further director selling. I believe this to be a significant negative indicator. Please go to this post for full details.
DSG International (DSGI, 55p), Dixons to you and me, hits the radar as a possible recovery stock.
On July 7th the ‘new’ CEO John Browett bought 125,000 shares at 38p, investing £47k.
Last Friday non exec Andrew Lynch bought 20,000 shares at 50p, investing just £10k.
These are the first decent purchases by directors of DSG in almost FIVE years, with the exception of non exec John Whybrows solo purchase on 21st June 2007 of 95,000 at 163p.
At the moment DSG will go on the ‘WEAK signal‘ list, pending further purchases by the same or other directors.
For a recent article on DSGs ‘past mistakes’ see The Times here.
Sir John Banham, Chairman of Johnson Matthey (JMAT, 1600p), yesterday bought 7400 shares at 1604p, investing £119,000 and taking his holding to 15400 shares.
Is this significant as a signal for investors?
Yes:
First purchase that I can find for any director looking back to 2004.
First purchase by Banham since he was made Chairman in April 2006.
Decent size in £.
Doubles size of holding for Banham.
No:
Sole buyer. Need to see other directors following Banhams lead by investing their own hard earned $$ before I invest in JMAT.
All the previous ‘acquisitions’ by directors have been through ‘Long Term Investment Plan’ options, whereby directors exercise the options and sell off around 40% to satisfy their tax liability.
So the jury remains out, but could change if/when we see other directors buying. As it stands, this is a WEAK SIGNAL.
Fiberweb (FWEB, 43.5p) are up 26% today (August 7) on the back of interim results demonstrating substantial benefits from cost cutting (Reuters results comment here).
In spite of this move, the CEO David Dayan and CFO David Abrams today bought 115,000 shares each at 43.11p.
This takes Dayan to 1,085,000 shares, and Abrams to 224,000 shares. So a significant % increase for CFO Abrams.
When I look back at historic buying, I find
- CEO Abrams has bought almost 1m shares since October 2007 at between 43p and 56p
- ALL six directors of the company have been buying shares. This is very unusual to have all the board investing like this.
And in my post of May 20th (‘Directors pile in after takeover talks collapse’ link here) I note that Fiberweb were also the subject of takeover talks which collapsed on April 23rd which resulted in the shareprice halving from near 60p to 30p.
To me this appears to be a very strong story: directors buying, cost cutting, potential takeover target.
The recent director buying activity means that Fiberweb stays on a STRONG signal.
Disclosure: I have a position in Fiberweb.
Addendum August 8th announcement by Fiberweb:
‘Richard Stillwell, Non-Executive Director of Fiberweb plc, purchased [on August 7th] 40,000 ordinary shares at a price of 43.5 pence per share. As a result of this transaction Mr Stillwell now beneficially owns 127,500 shares in Fiberweb.’
Bloomberg publish a monthly summary of insider activity, usually on the first business day of the following month.
This list is quite useful in prompting further research, but bear in mind that Bloomberg don’t filter out the ‘Executive Share Plan’ (and similar) deals, whereby the director gets allocated ‘free’ shares usually dependent on group financial performance against set targets. Would you buy shares if there was a good chance of getting one share ‘free’ for every share you bought?
To link to the Bloomberg ‘Top insider buying and selling in July’ news article click here.
I questioned earlier this year why we’d seen a lot of activity in the Recruitment Sector (Michael Page, SThree, Robert Walters). Either things weren’t as bad as the market forecasts for economic slowdown were indicating (unlikely given the high sensitivity of the sector to any change in economic growth), or we were to ‘expect future merger activity within the sector’.
Patience is a virtue. Those of you who have been patient are now rewarded after todays bid approach for Michael Page (MPI, 346p) from Adecco (news comment from Bloomberg here).
Michael Page are up 15% absolute and up 30% relative to the FTSE 250 since my note of November 25th.
For past commentary on the sector click here: Recruitment Sector
Robert Dickinson, a board member and former President and CEO of Carnival Cruise Lines at Carnival (CCL, 1793p) is using the recent bounce in the share price from a low of 1450p to sell down his holding in the Carnival and P&O cruise line business.
On June 24th he sold 18,000 shares at 1761p, realising £317,000.
On August 1st he sold 40,000 shares at 1864p, realising £715,000.
This leaves him with 160,000 shares in CCL.
Is Dickinson planning a cruise for his retirement, or does he think that the risks are on the downside for CCL ?
August 11th: Carnival announce that on August 8th Howard Frank, Vice Chairman and Chief operating Officer sold 66,000 shares at an average price of $ 39.6159 taking his holding in Carnival to 294,416 shares.
So now Frank and Dickinson between them have taken about $4.5m or £2 1/4m out of Carnival shares in the last 8 weeks. Not a positive indicator for the shares.
The ‘strength of signal’ derived from directors dealings moves from medium to STRONG.
I tend to concur with the Telegraph article of 29th June ‘Carnival shares no safe harbour’. Link to article here.
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.
Addendum
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.
followthedirectors... a study of directors share dealings 