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Isn’t two months a long time in these markets!!
I was trying to find this post about the Easyjet (EZJ, 359p) Chairman Colin Chandlers track record in buying shares, and thought I’d written it only last month.
Now we see Andrew Harrison, the CEO, last week buying 72,000 shares at 345p, putting £250k to work. He has increased his position by more than 1/3rd so far this year, having put in another £250k in January at 424p per share.
The stock fell ( collapsed?) last week after easyjet disclosed that it would suffer from jet fuel price rises. No kidding !! What do you pay these equity analysts to do? Any conversation with the company would have revealed how far forward they were hedged, and jet fuel prices are quoted daily.
I stick to my view in January that these guys are worth following.
I was intrigued to see, on the 13th March, Roy Gardner, Chairman of Compass group PLC (CPG, 309p) putting £200k to work (25,000 shares at 310p). I looked at managements track record with investing in their company, and found them to be pretty successful- no great blunders, but not trading in and out either.
I decided then that Compass Group should be watched. And hey presto, my inbox today shows the CEO Richard Cousins increasing his stake by 20% by buying 50,000 shares at 301.25p, investing £300k.
News ahead? Maybe a reassuring comment at the Trading Update on March 27th (see financial calendar).
See also ‘The Compass points South‘ February 8th 2009.
The Restaurant Group (RTN, 135p) keeps hitting the radar screen. This is the owner of Garfunkels, Frankie and Bennys, Chiquito, as well as many other brands and concessions, owning over 300 restaurants in the UK.
It hits the screen on director purchases, but also because these purchases are in a sector highly vulnerable to a fall in consumer confidence. And lastly, it scores highly due to the unusually high number of directors buying shares.
Five executive directors, the Non Exec Chairman, and the Company Secretary have over the last month put £400k to work in Restaurant Group shares.
Andrew Page, who was wise (not lucky, surely) enough to execrise an option and sell 650,000 shares at 351p in March last year, is now starting to buy back at less than half the price. Page has increased his position in Restaurant by about 60% over the last two weeks, buying 147,000 shares at between 140p and 147p.
Other directors who have participated in purchases are Bacon, Corzine, Morgan, Critoph, and Richardson, increasing their positions by between 15 and 50%.
Mike Butterworth, CFO, and Nick Salmon, CEO, of Cookson Group PLC (CKSN, 614p) yet again put their money where their mouth is.
Cookson on Tuesday declared in line results for 2007, with a confident outlook for 2008.
Butterworth and Salmon have been consistent buyers of the stock over the last three years. They last bought in March 2007, which prompted me to pick up some stock too. From March to October Cookson outperformed the FTSE250 by 40%. Since June 2005 Cookson were up 130% vs the FTSE250 up 60%, until October 2007. They’ve given up all this outperformance over the three months to January 2008.
The fact that Butterworth and Salmon have increased their holdings in Cookson by 90% and 45% respectively, gives me the confidence to buy some more for myself.
This is not a short term trade, ahead of news, but a longer term ‘invest alongside the management’ which has worked for me before.
Caveat: I’ve just read the statement from the company, not disclosed in the stock exchange statement, which shows this purchase to be part of the long term incentive plan. Under this plan, Butterworth and Salmon get ‘matching shares’ which means that essentially they’ve bought this stock at under 300p. So substantially lower risk to them than buying them at 590p (like you or I would have to).
3i Groups (III, 820.5p) CEO Philip Rea has ample experience in dealing in his companys shares. Experience that is worth noting.
In May/June 2006 he bought 30,000 shares at an average price of 830p
In August 2007 he sold 76,203 shares at 1070p.
And now, on March 4th 2008, he is seen buying 60,000 shares at 809p
In the Interim management Statement of January 24th, Yea stated: ‘Our mid-market position and the depth of our international network have allowed us to continue to source good investment opportunities notwithstanding the more difficult economic outlook.’
If there is one person who knows what is going on on the ground, in terms of the economic performance of the companies 3i have invested in, then it’s Rea.
Reas purchase of 60,000 shares takes him to 336,000 shares, so this is what I would deem a significant investment in proportion to his current holding in the company. I’d like to see a few other directors lifting their stakes too.
But because Rea has his ear to the ground, I see this as a vote of confidence not only in 3i, but also in the broader market.
For all posts on 3i click here.
Alison Carnwath last Friday invested just shy of £1m in Land Securities (LAND, 1580p). Carnwath (bio) has held the position of non exec director since April 2004, and this appears to be her first major purchase in that time.
Previous insiders buying Lands shares have included Myners (non exec Chairman), Ellis (Executive Director) and Salway (CEO), who all bought back in July last year, at prices only about 10% higher than today.
The real estate sector is up about 11% since its low in mid November, when we started to comment on directors buys in the sector, whereas the FT All Share index has fallen by 4%.
If you look at the ratio of net activity in the sector, net buys (above £50k) number 26 companies in the sector now, versus net sells (above £50k) only four, taken over the last three months. This in itself remains a pretty strong signal to stay invested in the real estate sector.
Robert Walters (RWA, 167p) directors, having sold 4.7m shares from March to September last year, at prices between 330p and 368p, are now starting to buy back their positions.
Robert Walters, CEO, and Giles Daubeney, COO, have this week bought 740,000 shares at around the 150p mark. Allan Bannatyne, CFO, has started a position by investing about £65,000 at the same level. See Yahoo Finance for details.
In August last year Robert Walters was ‘the subject of takeover interest from leisure recruitment specialist Berkeley Scott’ (Telegraph 21/8).
In November last year we saw directors of Michael Page (MPI) and SThree (STHR) investing quite heavily, investing £1.1m between them (see Michael Page comments).
Maybe conditions in this sector, which has a high sensitivity to economic growth, aren’t as bad as the market thinks. Or maybe expect future merger activity within the sector.
Next news Tuesday March 4th- Michael Page earnings release. Expect a comment on current trading.
Graeme Gordon, son of the founder of Liberty Intl (LII, 958p) Sir Donald Gordon, and Non Executive Director, has invested £250k in Liberty International shares at 992p.
I looked back at historic trading, and Gordon nailed this one back in May 2006, when he bought 43,000 shares at 1001p. By the end of the year he was up 40% on that trade. His co directors started selling ap at the £14 level in late 2006 early 2007, and have sold down to 1120p in late 2007.
So yes, Gordons trade looks interesting from a timing point of view.
BUT – why bother? He’s already got £15m in Liberty shares in his own name, and must have claims on a significant portion of the ‘Gordon Family Interests’ £730m worth of Liberty Intl shares.
So even though this looks interesting, I’m going to discount the value of this signal due the the tiny increase in share ownership by Gordon. Now if he invested £5m, that would be a different matter…..
followthedirectors... a study of directors share dealings 