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Dairy Crest (DCG, 551p) non execs have each bought 5,000 shares at 542p.
Why is this interesting?
1. Solid cash flow milk, cheese and yoghurt business – defensive
2. Able to pass on price rises – offer protection against inflation
3. Year end 31 March – soon- good news in the pipeline?
4. Well liked- read Questor (scroll down to the bottom of the page)
5. 27% off their high
6. Rapidly growing home delivery program- milk and more
Non execs David Richardson, Carole Piwnica, and Non exec Chairman Simon Oliver, each invested £27k in Dairy Crest.
This is a relatively safe, defensive investment, with good news ahead.
It’s interesting to see over the last week or so directors at Halfords (HFD), Woolworths (WLW), N Brown (BWNG), Instore (INST) and Kingfisher (KGF) add to their holdings.
Buys in the General Retailers sector over the last month took place at 14 companies (net 1 month, over £50k, source digitallook), with no companies reporting director sales. This compares with data showing, over the last twelve months (same criteria over total of twelve months), 32 companies with net buys, and 14 with net sells. I believe this to be a significant indicator for the sector, however when looking at individual companies the ‘value’ of this signal is not so clear.
In analysing directors dealings I look for a change of attitude (ie from buy to sell or vice versa) and a historically successful track record in dealing by directors of the company.
Kingfisher (KGF, 133p) Ian Cheshire, CEO, added to his holding this week by buying 268,000 shares at 148p. But he also bought stock in October ’06 at 256p. Is he averaging down, or is this a vote for himself, having taken on the CEO position on January 28th?
N Brown (BWNG, 243p) shows the CEO buying 150k at 240p, but the CFO selling 56k shares at the same price. So in my mind they cancel each other out.
However at Halfords (HFD, 276p), two non execs bought a smallish amount of shares at 269p. This is Wilsons first foray, and Pym, Halfords Chairman, increased his position by about 50%. What is interesting is that Pym bought stock in June 2006 at 289p, also 10,000 shares. Halfords share price then ran to 411p in July 2007, which incidentally is where CEO Mcleod sold a significant block of stock.
I’d like to see more buying from Halfords directors before throwing myself into this one. But Halfords should be added to the watchlist.
‘EasyJet slides as planes fly with empty seats’
Easyjet shares have recently taken a nosedive, prompting four directors to increase their holdings by a significant amount (Michels- Non exec, Browett- Non exec, Chandler- Chairman, and Harrison- CEO).
It is the Chairman, Sir Colin Chandler, who has the best track record. He has bought stock three times in the last five years. Within 10-12 months of his purchase, on each occasion, the share price has appreciated by between 70% to 110%.
February 2003- paid 205p. easyjet shares traded at 370p 10 months later.
August 2004- paid 140p. easyjet shares traded at 300p 12 months later.
February 2006- paid 378p. easyjet shares traded at 650p 10 months later.
January 2008- paid 424p.
OK, so Chandler never banked his profits. But from the evidence above he clearly recognises a buying opportunity. An example I’m happy to follow.
I was prompted to take a relook at Aegis (AGS, 115p) today after reading Questors thoughts. I had noticed in November unusual behaviour by three executive directors who were buying shares in their employer, in an industry I believe to be highly exposed to economic growth. I noticed then that this was a company well positioned to benefit from ‘digital media’.
Mainardo Nardis (CEO of Aegis Media division), Alicia Lesniak (CFO), and Robert Lerwill (CEO) all bought shares between 14th and 19th November, at prices between 116p and 118p, totalling £175k. This was a change in behaviour, as three other directors at Aegis (Chedore, Hicks and Verklin) had, over 12 months to May 2007, unloaded about 3.2m shares between them at prices between 126p and 145p.
It is rather brave don’t you think to buy shares and then, only one month later, issue a trading statement which results in a 6% upward move in the share price? Here is a brief extract: ‘Group organic revenue growth ….remained very strong, and significantly ahead of the market’.
I also agree with Questor ‘it looks like good value’.
I’ve been looking at Glen Moreno (Non exec Chairman) of Pearson (PSON, 705p) share purchases. Moreno appears to be a pretty cautious guy, buying 5000 shares at a time, so he hasn’t really hit my radar. But looking back, he has invested about £360k in 45,000 shares in Pearson since August 2007, increasing his holding by almost 50% to £1.2m. He last paid 703p on the 18th December for 10,000 shares.
Now take a look at Reed Elsevier (REL, 653p), also a FTSE100 media stock. Here we see Patrick Tierney realising £159k through a sale of 25,000 shares, taking his holding down to just 37,000 shares, worth about £243k.
Tierney is Chief Executive of Harcourt Education, a division of Reed Elsevier. He is also a pretty shrewd market operator, having exercised options over 171k shares and then sold the shares within 2% of the years high for Reed, at 676p. It appears he also sold a further 52k shares at 644p on the same day in May.
It may be that Patrick Tierney no longer has a job, as Reed have recently completed the sale of their Education division, and that is why he is selling down his position in Reed. But I would give him due credit for his trading ability, and suggest that the recent share price run in Reed is coming to an end.
CFO of Next (NXT, 1740p) David Keens increased his holding in the group by 10,000 shares to 145,000 shares this week, at 1711p, investing around £171k.
Is this significant? Maybe. If you assume that Shirley Keens and David Keens speak with each other, and their finances are related, then this purchase partly reverses a sale by Shirley Keens of 45,000 shares at 2245p on April 17th this year, raising £1m. However the press release at the time claimed that Shirley Keens ‘manages her assets independently’ of Mr Keens.
Simon Wolfson, CEO, in March raised over £3.5m by selling 160,000 shares at prices between 2303p and 2309p.
Another recent buyer is Christos Angelides (exec director), who was credited with being a ‘weather forecaster’ in the last week of July, investing £180k ahead of a desperately needed sunny weekend. Next shares rallied by £3 to £22 in the three months after his purchase. Last week Steve Barber (non exec) also stepped up, but invested only £8,000.
Why am I not totally convinced? Because Keens has only increased his holding by about 8%, and I’d like to see a little more commitment from both him and other directors in the sector, where we’ve seen purchases by directors of WHSmith, Lookers and Pendragon in the last week.
followthedirectors... a study of directors share dealings 