You are currently browsing the daily archive for October 19, 2008.

This stock really has plummeted. I suppose welding and air and gas handling are hugely sensitive to the economic cycle (Charter website). But is the 67% fall in share price since October 1st more than discounting the potential impact of a recession?

A look at the numbers for Charter plc (CHTR, 326p) shows great cashflow generation and decent asset backing, but little dividend payout. But as in anything only time will tell if the two directors who bought shares on Friday are right.

Non exec John Neill bought 20,000 shares at 345p taking his position to 87,000 shares, and

CEO Michael Foster, through his Mrs Mariam Foster, bought 10,000 shares at 314.25p, taking his/their holding to 33,000 shares.

Only five weeks earlier Neill had paid more than double the price. And Foster paid above GBP 10 in November last year.  So I’d like to see support from other directors thereby building a consensus with which I’d be happier to buy shares myself.

In the meantime, one to watch.

View on Charter plc: Positive- directors buying shares.

Strength of Signal: Medium. Need to see more directors buying to merit a STRONG signal.

Only last week, October 15th, followthedirectors wrote ‘Technical director thinks DANA Petroleum undervalued‘.

One day later. the CEO Tom Cross, and one of the non executive directors Philip Dayer, also bought shares in Dana Petroleum (DNX, 831p).

Non exec Philip Dayer bought 5787 shares at 864p, taking his holding to 9387 shares. CEO Cross bought 43490 shares at 853p, taking his holding to 1,044,890 shares.

So this isn’t a significant move on Cross’s part. But when you look at the $$ amount invested (GBP 370k), and the coincidental purchase of shares by three other directors in the week (Brian Johnston non exec, and Stuart Paton Technical and Commercial Director, as well as Dayer above), then Dana Petroleum starts to look interesting.

Also remember (see link to comment above) that Cross and his CFO McFarlane were diligent enough to exercise and sell shares in June at near to GBP 19, within 5% of the high for Dana. You have to give them some credit for their timing.

View on Dana: Positive, directors buying

Signal Strength: STRONG (up from Medium) on the news that now four directors out of the board of eight are buying shares.

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