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This must be a classic case of saying one thing and doing another. Hank Greenberg reportedly raised $129m by selling down his stake in AIG (AIG) whilst extolling the virtues of the company.
My view: ‘Actions speak louder than words’, the basis and reason for my analysis of directors dealings.
You must read FT Alphavilles article on this share sale. Click here.
In a year of turmoil for ITV (ITV, 43.5p) due to advertising slowdown, a switch away from viewing TV to computers and many other ongoing dramas, the ITV share price has fallen from 121p high in May last year, to a low of 38p in July this year.
If you look at the recent press comment, there is an ongoing discussion with Ofcom over how much ITV can cut back to reduce its costs.
In this time of turmoil it is therefore intriguing to see directors starting to buy.
Ian Griffiths, CFO, on September 10th bought 100,000 shares at 47.2p, initiating his holding, only a day after he was appointed (did he feel duty bound to buy shares to shares?).
Peter Fincham, Director of Television, on September 24th bought 350,000 shares at 42.75p, also initiating a position.
And Sir George Russell, the Deputy Chairman, via Lady Russell, bought 57,000 shares at 43p on September 24th, taking their holding to 62,000 shares.
I’d like to see a few other directors buy shares at these levels, especially when they’ve paid prices 50-150% higher in the past. In particular Cresswell, Ormerod and Crosby.
In the meantime these transactions merit a ‘WEAK signal’, with the potential to be upgraded pending further director purchases.
Tempus on Wednesday declared that ‘Tate and Lyles share price caning is an opportunity to buy back in’, after the share price fell 10% over the judges decision of a patent case on sucralose.
Clearly management at Tate and Lyle (TATE, 384p) agree with Tempus. Six directors bought shares at just over 380p on Wednesday and Thursday this week, investing just under GBP 30k each on avearge, and increasing their holdings by an average of close to 60%.
Directors have been active at prices between 380p and 440p since October last year, taking the total number of directors (exec and non exec) buying shares to seven out of a board of 10, a significant proportion.
I’d love to see a bit more cash committed by directors, but in light of the consistent buying over the year, the % increase in holdings, and the high proportion of the board participating, I believe these share purchases to be a STRONG signal.
Signal strength: STRONG
For details of directors activity see www.digitallook.com, type in TATE, and choose Director Deals tab.
