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Dana Petroleum – profits ‘surge’, shares up 47%. Thanks Tom.
April 5, 2009 in Directors buying, FTSE 250 company, STRONG signal | Tags: Dana Petroleum, DNX, Tom Cross | Leave a comment
Tom Cross, CEO of Dana Petroleum (DNX 1223p) has a great track record- again!
Back in June last year he and a colleague, David MacFarlane exercised options and sold significant amounts of shares in Dana Petroleum (DNX, 1223p) at close to 19 pounds a share.
In the market turmoil of October Cross bought shares back at 10 pounds a share CHEAPER.
Since then the market has bounced, as has the oil price, and the shares are up 50%.
I’m sure there’s more to go, and longer term you might want to follow Cross’s lead, not mine.
But having seen great results (‘surge in annual net profit‘) for the year to December 2008 (note to self: 10 months were ‘in the bag’ when Cross and Dayer bought shares), I’m happy to take Dana off the ‘STRONG signal, ‘Directors buying’, ‘Positive’ list, with a 47% absolute return and a 34% relative outperformance against the market (FTSE 250 index).
Note of October 19th ‘CEO invests at 853p having sold at 1886p in June’:
Only last week, October 15th, followthedirectors wrote ‘Technical director thinks DANA Petroleum undervalued‘.
One day later. the CEO Tom Cross, and one of the non executive directors Philip Dayer, also bought shares in Dana Petroleum (DNX, 831p).
Non exec Philip Dayer bought 5787 shares at 864p, taking his holding to 9387 shares. CEO Cross bought 43490 shares at 853p, taking his holding to 1,044,890 shares.
So this isn’t a significant move on Cross’s part. But when you look at the $$ amount invested (GBP 370k), and the coincidental purchase of shares by three other directors in the week (Brian Johnston non exec, and Stuart Paton Technical and Commercial Director, as well as Dayer above), then Dana Petroleum starts to look interesting.
View on Dana: Neutral
For all Dana Petroleum comments see here.
Allscripts (MDRX) comes off ‘positive’ list with 96% return.
April 5, 2009 in Directors buying, STRONG signal | Tags: Allscripts, Glen Tullman, MDRX, Mike Lawrie, Misys, MSY | Leave a comment
It wasn’t that long ago (end of October), when Allscripts were trading at around $5, that we spotted an announcement by Misys (MSY, 124p) that their CEO, Mike Lawrie, was buying shares in Allscripts (MDRX, $10.84), the medical software group in which Misys own a majority position. Lawrie was followed shortly afterwards in his purchases by Glen Tullman, CEO of Allscripts.
We thought this purchase in shares of a subsidiary unusual, and suspected Lawrie of believing there to be better opportunities in Allscripts than in Misys.
The WSJ’s Inside Track picked up on our story on November 5th.
Since our note of October 30th (link here), Allscripts are up 96% in absolute terms, and up 120% vs the Dow Index.
Misys shares in dollar terms are pretty much unchanged over the period.
So Lawrie was right. Very right.
Why take Allscripts (MDRX) off the positive list? Because we think the share price now matches the markets expectations in the medium term: Q3 profits were out last week, and despite ‘better than expected results’ the stock was down 28c on the day (MSN Money).
Extract from our note of October 30th 2008:
‘Mike Lawrie, CEO of Misys plc (MSY, 118p), and Chairman of Allscripts after Misys completed a purchase of the majority of the shares in the company, has bought 70,000 shares in Allscripts at $5.0921 (27th October- source London Stock Exchange– type MSY into Code box).
Lawrie already has a $1m shareholding in Misys (excluding his share options and performance plan shares). Does he now think Allscripts is the cheap (er) way to invest in the group?’
View on Allscripts: Neutral
For all our earlier comments on Allscripts click here.
Robert Walters and Giles Daubeney buy again (RWA)
March 27, 2009 in Directors buying, FTSE Small Cap, WEAK signal | Tags: Giles Daubeney, Recruitment sector, Robert Walters, Robert Walters plc | Leave a comment
A reader asked me whether the recent share purchases in Robert Walters were significant.
This is my response:
Re Robert Walters Directors Share Purchases.
The share purchases you refer to took place on March 20th and are by CEO Robert Walters, who bought 143,000 shares at 82p taking his holding to 2.3million (excluding any options), COO Giles Daubeney, who bought 48,000 shares at 82p taking his holding to 1.66m, and CFO Alan Bannatyne, who bought 18,000 shares taking his holding to 108,000 shares.
Are these a good indicator of likely future share performance?
Long term (2+ years), I’d say yes.
Walters and Daubeney have a good track record, in that they sold respectively around 4.2m shares at prices between 246p and 360p, and 1.6m shares at between 246p and 368p, over the 16 month period between May 2006 and September 2007. The shares reached a high of 393p in July 2007! (source http://www.Digitallook.com)
So judging on historical performance, you can see these guys got out when the going was good! Does that mean it’s rightfor you and me to be buying the shares now?
First, let’s look at the sales. They took place over 16 months. They were consistent and measured. You’d probably need to assume that the buying by Walters and Daubeney that started in February 2008 might also go on for more than a year.
Secondly, is it possible to call the bottom. No. Walters and Daubeney bought shares at 150-151p in February 2008 (460,000 shares and 216,000 shares respectively).
Walters also paid 90p in November 2008. If you look at the specific purchases from last week, they are a small incremental financial commitment to already significant positions, and therefore do not signal any near term positive news. If they had increased their holdings by 20-30% that would be a different matter.
Thirdly, my analysis of 357 directors transactions over the last 15 months shows that Executive directors transactions have performed pretty much in line with the markets (-1.5% relative), whereas non executive directors have outperformed the market by 6.7 % (relative).
When Executive Directors purchases are supported by Non Executive directors purchases, the relative share performance improves substantially.
So if you are looking to buy shares in Robert Walters, wait for a non executive director purchase to complete the signal.
Regards,
Simon Winfield
3i (III)- five of the seven non execs have bought shares in last month
February 25, 2009 in Directors buying, FTSE 100, STRONG signal | Tags: 3i Group, III | 1 comment
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.
Tate and Lyle (TATE)- new Chairman buys into sugar group
February 25, 2009 in Directors buying, FTSE 100, STRONG signal | Tags: Tate and Lyle | Leave a comment
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
Rio Tinto (RIO)- directors support Chinalco deal by buying shares
February 17, 2009 in Directors buying, FTSE 100, WEAK signal | Tags: Chinalco, Dick Evans, Lord Kerr, Paul Skinner, RIO, Rio Tinto | Leave a comment
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)
BT Group (BT.A)- CEO share purchase not a positive signal
February 15, 2009 in Directors buying, FTSE 100, WEAK signal | Tags: BT Group, Hanif Lalani, Ian Livingstone, Sir Michael Rake | Leave a comment
Back in August last year, the CFO of BT Group (BT.A, 99p) Hanif Lalani, invested GBP 100,000 at 171p.
On Friday he was joined by his CEO Ian Livingstone, who bought 99,500 shares at 99.7p, taking his holding to 759,000 shares, in addition to over 2.5 million deferred compensation and incentive shares.
This isn’t a buy signal.
Livingstone has been in and out of BT all year, and this purchase does not signal any change in behaviour. Livingstone bought at 230p in February 2008, sold at 233p and 172p in May and August, and bought at 163p in August also. Make of that what you will!
For a positive signal on the stock, we need to see more non execs buying. Chairman Sir Michael Rake bought at 127p and 166p in September and November 2008, almost doubling his holding by buying 32,000 shares. BT has seven other non execs, and they haven’t bought yet.
View on BT Group: Neutral
Signal from directors dealing activity: WEAK
3i – close negative view with 67% relative underperformance
February 2, 2009 in Directors buying, FTSE 100, MEDIUM signal | Tags: 3i Group | Leave a comment
So Yea was right, again.
Yea, until last week the CEO of the UK venture capital group 3i (III, 219p), sold GBP 500,000 of shares back in July 2008 at 823.5p (see ‘3i- Hooray for Yea- now take profits‘-followthedirectors.co.uk July 23rd)
3i shares are now trading at 219p, a fall of 76%. The FTSE 100 index has fallen over the same period by 24%. In my calculations that means that 3i have underperformed the index by around 67% since July last year, when Yea sold his shares.
Last week 3i announced a new CEO, Michael Queen. Queens appointment was swiftly followed by a raft of directors purchases, which may have some significance (see below).
I’m always a little wary of these sort of directors dealings. Are they expressing their support for the incoming CEO, or do the directors think they can make money by buying shares ahead of significant cost cutting announcements or changes in strategy?
As a result of my concerns I’m only going to give these signals a MEDIUM rating, pending further director buying activity. But having said that, I’m happy to close my negative view on 3i, and to take some very nice profits.
View on 3i: POSITIVE
Strength of Signal: MEDIUM
For all posts on 3i click here.
Directors purchases (source London Stock Exchange):
Michael Queen, CEO, bought 100,000 shares at 216.6p, initiating a position. Jan 30th.
Willem Mesdag, Non exec, bought 25,000 at 210p, initiating a position (I estimate). Jan 29th.
Guy Zarzavatjian, PDMR, bought 305,000 at 210.7p, postion unknown. Jan 29th.
Lord Smith, Non exec, bought 5,000 shares at 213p, taking his holding to 9500 shares. Jan 29th.
Robert Swannell, Non exec, bought 4,000 shares at 210.3p, taking his holding to 17,000 shares. Jan 29th.
Baroness Hogg, Chairman, bought 5,000 shares at 213p, taking her holding to 5,000 shares. Jan 29th.
Marks and Spencer – non exec Du Plessis initiates position
January 22, 2009 in Directors buying, FTSE 100, WEAK signal | Tags: Marks and Spencer, Retailers | Leave a comment
The risk to Marks and Spencer (MKS, 222p) was obvious from what I perceived to be exposure to a customer base with limited spending power. The whiff of Lily of the Valley with a faint hint of urine as I descended the escalator to the underwear and luxury foods hall at Marks’ Aberdeen branch betrayed the identity of a large part of the groups customer base, the female pensioner.
When the mother in law switched her twice weekly shop from the nice fish and pre cut green beans in the food hall at Marks to the scrums at ASDA was when the profit warnings started. With UK interest rates collapsing, the purchasing power of this segment of Marks’ customer base has now evaporated.
But we have seen directors starting to buy shares, although in limited volumes.
I was tentative when Marks’ Deputy Chairman Sir David Michels picked up 84,000 shares in July and August between 249p and 265p (See ‘Marks- Sir David Michels increases holdings by 50%’).
Marks have however outperformed the index since August 16th, by 8%.
I still am tentative when I see Non Executive Director Jan du Plessis buy 20,000 shares at 222p (January 21st 2009), initiating a position in the group having been appointed non exec on November 1st 2008.
Du Plessis earned his stripes as CFO of the Swiss and South African luxury goods group Richemont for 16 years to 2004.
My view on Marks remains unchanged until I see more directors committing capital in bigger $$ amounts, something which may happen soon. Come on Mr Rose.
View on Marks and Spencer: Positive
Strength of Signal: Weak (requires further director buying to move towards Strong)
For all Marks and Spencer comments on this site, click here: Marks and Spencer
Rocket scientist director buys Cairn shares
January 19, 2009 in Directors buying, FTSE 100, MEDIUM signal | Tags: Cairn Energy PLC, Energy sector | Leave a comment
Only a day after being appointed a non exec of Cairn (CNE, 1806p), Dr James Buckee has invested GBP 35k by buying 2000 shares at 1762p.
‘Dr Buckee was previously President and Chief Executive Officer of Talisman Energy Inc. Dr Buckee holds a BSc Honours in Physics from the University of Western Australia and a PhD in Astrophysics from Oxford University’ (Company website).
In October 2008, six directors of Cairn invested just shy of GBP 480k at 1816p. See ‘Cairn Energy – Directors buyback closes negative view with 45% return’.
Since then Cairn have outperformed the market (FTSE 100) by 9%.
In April 2008 two non exec directors of Cairn sold shares at 2915p, and in May six directors sold shares at 3366p. From April to October Cairn fell 45%, which was 20% more than the market. See ‘Cairn Energy- non execs reduce holdings substantially’.
Based on historical performance, I believe that any dealing activity by Cairn directors is worth listening to.
View on Cairn: Positive
Strength of signal: Medium, no change from our comment of October 9th 2008.
News ahead: Operational Update from Cairn tomorrow (!) January 20th.
For all our comments on Cairn click here.
followthedirectors... a study of directors share dealings 