You are currently browsing the daily archive for February 25, 2009.

On February 2nd we closed our negative view on 3i (III, 206p) with a 67% return relative to the market, or a 76% absolute return (post here).

We were a little wary of recent directors purchases, suggesting that they were in support of the incoming CEO Michael Queen.

The market appluaded McQueens appointment and rewarded the shares with a 23% run in the following two weeks. Since then however concerns have arisen over 3i’s credit rating, and the shares have given up all those gains.

On February 4th Richard Meddings, non exec, added a further 5,000 shares at 225p, and on 24th February Willem Mesdag, another non exec, doubled his position by buying 25,000 shares at 198.5p.

Over the last month therefore we have five of the seven non execs buying shares, althouh admittedly in limited volumes. Total purchases by non execs add up to only 70,000 shares.

However due to the number of non execs buying shares, we are moving 3i from a MEDIUM strength signal to a STRONG signal.

View on 3i: Positive

Strength of Signal: STRONG

For all posts on 3i click here.

Chairman Elect Sir Peter Gershon has invested GBP 133k in Tate and Lyle (TATE, 282p), ahead of his arrival at  Sugar Quay.

Is this purchase a vote for himself, or a money making opportunity?

When in September six of the seven non execs of Tate bought shares (see Tate sweetener, directors see opportunity in weak share price, September 26) , the share price had outperformed the market by around 50% over the following two months.

Having hit the earth with a bang, giving up all its relative gains over a falloff in fizzy drink demand, it seems the newest non exec, Chairman Elect Peter Gershon sees value.

View on Tate and Lyle: Remains positive- high number of non execs buying shares over last 5 months.

Strength of Signal: Remains STRONG

Yesterday Carnival (CCL, 1411p) announced hat two directors had sold shares.

In fact both Peter Ratcliffe, Board director, and David Dingle, CEO of Carnival UK, had both exercised options and sold the resulting shares, Ratcliffe realising GBP 240k, and Dingle realising GBP 45k.

If a director sells sufficient shares to pay his/her taxes due on the options exercise then I consider the transaction a ‘neutral’ one. If a director sells all the shares exercised then I consider it a disposal, and a negative indicator.

So these transactions I view as negative for the shares. Ratcliffe realised GBP 150k earlier this month through a sale of  12,500 shares.

Directors have been selling since August last year. Carnival shares have performed in line with the market over the period.

View on Carnival: Negative

Strength of Signal: STRONG

For all previous posts on Carnival see here.

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