You are currently browsing the monthly archive for February 2009.
I’ve noticed on my Google calendar that Brambles (BXB, 280p) Interims to December 2008 are due February 19th. Then I look at the recent share price movement, sharply lower over the week, falling by about 10%, and I wonder if the insiders are aware of pending bad news.
Craig van der Laan, Head of CHEP Asia Pacific, caught my eye through his share sales early last year (March 23rd: ‘Brambles directors sale- Economic slowdown starting to hit?‘).
Van der Laan continued to sell through March, May and June, following which we saw dissappointing results in August. Van der Laan has carried on selling, his last transaction was in October when he sold 180,000 shares at 328p (A$ 7.03). He now owns directly only 15,000 shares (source : London Stock Exchange, Digitallook).
I’m not sure where we stand on the negotiations for the Walmart contract, but can imagine that both volume and price pressures would have continued to impact CHEP.
So put February 19th in your diary for an interesting set of results.
For all our posts on Brambles see here.
Last news update- November 25th Bloomberg: ‘Shares slump in challenging conditions’.
Sage directors have not been great fans of the company shares for a while now, transacting only share sales, no purchases, over the last twelve months.
Most notable for their timing were sales by the Group CFO and the CEO of Mainland Europe and Asia, in September 2008 at 190p, just before the shares along with the rest of the stockmarket collapsed into a hole. The share sales were made after exercising options, but I view the sale of all 100% of the shares exercised as a negative signal. For a neutral view, directors would sell only sufficient shares to pay for their tax liability on the options exercise, usually around 40%.
Sage last week announced results. The Wall Street Journal commented that ‘ trading in the three months to Dec. 31 had met its expectations, but its shares fell amid concerns over its U.S. performance and uncertain outlook’ (February 4th)
Sage (SGE, 178p) on Friday announced that Guy Berruyer, the CEO of Mainland Europe and Asia, had sold 75,000 shares at 176p, taking his holding to 240,000 shares. I view this as a negative signal, and adopt a cautious view on the shares.
View on Sage: Negative
Strength of Signal: Medium
Miguel Ramis, Compass’ Head of European Operations, not a board director, but an individual of PDMR (person with direct management responsibility) has sold 120,000 shares at 355.89p leaving him with 548,000 shares (London Stock Exchange February 6th 2009).
Compass Group (CPG, 355p) have been a wonderful outperformer relative to the market, up 50% since we turned positive on the shares on March 18th (‘followthedirectors: The Compass points North‘) as a consequence of share purchases by Roy Gardner the Chairman, and Richard Cousins the CEO.
If you remember, the market had concerns over food price inflation, and whether or not Compass would be able to recover increased costs in their contracts.
The company statement announcing Ramis’ share sale describes him using the proceeds ‘used in repect of settlement of the specific lending obligations‘. Doesn’t that mean he’s paying down a loan?
I interpret this as a lame excuse for his share sale, and I am happy to take profits on shares bought in March at 309p, a performance 50% better than that of the FTSE 100 index.
View on Compass Group: Negative
Strength of Signal: Medium
On November 26th, ‘Market veteran buys back into IG Group‘, we analysed Jonathan Davies’ purchase of 90,000 shares in IG Group (IGG, 280p) at 183p as a buy signal (although a WEAK one: solo buyer, small % increase in holding).
Since then IG Group are up 37% absolute or up more than 30% relative to the market.
Now we see that last week Peter Hetherington, IG Groups Chief Operating Officer, sold 700,000 shares at 284p, taking his holding to 976,000 shares (January 28th, 29th, source London Stock Exchange).
Hetherington has an excellent track record. He sold almost 40% of his holding, or 1m shares, at 400p in October 2007, within 7% of the all time high achieved the same month.
View on IG Group: Negative. Take profits on any purchases of November 26th.
Strength of Signal: STRONG
Between January and May last year, the CEO of easyjet (EZJ 301p), Andrew Harrison, doubled his position in the group by investing almost GBP 1.2 million ( ‘Harrison accelerates buying of Easyjet‘- followthedirectors, May 29th 2008).
Now Harrison has almost halved his position by selling 400,000 shares at 326p (January 28th, London Stock Exchange), leaving him with 438,000 shares.
Harrison bought easyjet shares when we were all panicking about highly inflationary oil prices. Oil peaked within two months of Harrisons share purchase, and easyjet shares outperformed the FTSE 250 by more than 60% from May 29th to now.
Is this directors share sale an important signal?
Yes, certainly for easyjet shareholders who have substantially outperformed the market, and in absolute terms are flat on the May 29th level, quite a remarkable achievement in these turbulent times.
And maybe even for Crude oil watchers.
Either costs are going to start rising at easyjet, or yields are at risk, despite what the company says in their statements ‘easyjet sees better H1‘ (Reuters January 22nd).
View on easyjet: Negative
Strength of Signal: Strong (track record, size and % of share sale)
followthedirectors... a study of directors share dealings 