You are currently browsing the daily archive for February 17, 2009.
Sell high, Buy low. That’s what I was taught.
This completely failed when in September I suggested that De La Rue (DLAR, 1001p) were ‘up with events’. The company declared a ‘strong order book’ and ‘operating cashflow remains strong’.
This resilience, coupled with a market meltdown in October, meant that investors were prepared to pay a premium for certainty of cashflow, hence De La Rue’s 48% outperformance against the market (September post ‘De La Rue CEO and CFO raise 1 million pounds’).
CFO Stephen King yesterday sold just under 30,000 shares at 1001p, taking his holding down to around 16,000 shares.
I’m of the belief that things can’t get any better for De La Rue, and continue my cautious stance. Also, take a look at Kings timing. He seems pretty good at taking advantage of the share spikes to optimise his share sales.
View on De la Rue: Negative
Strength of Signal: Remains STRONG
Three directors of Rio have invested about GBP 560,000 in RioTinto (RIO, 1925p) shares over the last few days.
On their own, I would see this as a STRONG signal to investors, but as Rio are in the process of asking shareholders to approve the terms of the Chinalco deal, I think these purchases should be taken with a healthy dose of scepticism.
Paul Skinner, Chairman of Rio Tinto, said in a recent press release (February 12th, http://www.riotinto.com):
“Chinalco’s investment is a clear vote of confidence in Rio Tinto’s strength, its growth prospects and the outlook for the commodities we produce.”
To show his personal support for the deal (I believe) Skinner has bought 4000 shares at GBP 19.6955, investing almost GBP 80k (source: London Stock Exchange, date 16/2/09). Put this in the context of Skinners pay as Chairman, GBP 693,000 in 2007 (source: RioTinto annual report 2007).
The other purchases were made by Executive Director Dick Evans, who bought 10,000 ADRs at $114.685 (13/2/09) and Lord Kerr (Non executive director) who bought 4000 shares at GBP 19.38 (16/1/09) (source: London Stock Exchange).
View on RioTinto: Positive
Strength of Signal: WEAK (clouded by company being in the process of a share offer and asset sale)
I’m not suggesting that Carphone Warehouse’s (CPW, 108.5) CEO Charles Dunstones message of ‘dread’ to his staff prompted Non Exec Chairman John Gildersleeves share sale.
Gildersleeve did say the sale of 138,000 shares at 108.75p was ‘for tax planning purposes’ (source:London Stock Exchange). But then I suppose he would be very unlikely to say ‘because the shares are expensive’ would he?
Gildersleeve is left with 246,000 shares post this sale.
Charles Dunstones email last month to staff was aimed at reducing costs and increasing subscriber numbers. Dunstone concluded by saying
“I am sorry to have to send such a grim message, but I feel it is my duty to prepare us for the worst; everything I read and observe fills me with dread for the state of the whole global economy” (Source: channelregister.co.uk reported 16th January 2009)
I suppose we should have paid more attention to mr Dunstones partner, David Ross, who in June last year sold 15 million shares to the Carphone Warehouse Employee Benefit Trust at 217.5p (June 19th 2008 source: London Stock Exchange). I bet the employees aren’t too chuffed.
View on Carphone Warehouse: Negative
Strength of Signal: Medium
followthedirectors... a study of directors share dealings 