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Ian McHoul, a non executive director of Premier Foods (PFD, 33p) last week sold 177,000 shares at between 34.67p and 34.75p, to take his holding to zero.

We turned positive on Premier Foods on October 21st at 32.25p, on the news that 7 directors and 4 PDMRs bought shares (followthedirectors comment of October 21st here).

It has been a bit of a roller coaster ride in this one, with the shares driven this way and that over funding concerns, trading as low as 16p and as high as 38p.

These concerns were addressed at the beginning of March, when the company raised GBP 37om net of expenses, which gives them plenty of breathing room with the debt covenants pushed out to 2013 (Independent article of 6th March).

We close our positive view as a result on the sale of shares by the non exec.

Performance since October 21st 2008: +3% absolute, -6% relative.

View on Premier Foods : Neutral

Wow- ‘Liberty undermined by fundraising chatter’ (Independent)’ (LII, 365p)

Sounds very underhand to me.

But wait – only a month ago, Liberty International announced results and said they ‘intend to take further action to improve our liquidity and financial strength, including potential further asset sales and new capital raising’ (February 26th Liberty International Preliminary Results announcement).

Judging by the share price since then, the bears have been covering their shorts (Liberty up 15% from Feb 25th to last night, FTSE unchanged) , and we are reminded through market gossip that the capital raising is imminent.

The cynic in me says that Goldman are not involved, hence the move to a SELL with a target of 302p (Independent article). Where were you Goldman when the price was near 1000p in August last year, and senior management of Liberty were selling shares?

Since our note on August 31st (link below), Liberty International are down 62% in absolute terms, or down 44% relative to the FTSE 100 index.

The ‘directors selling’ signal was reinforced in January 2009, when we saw Harold Newton and William Black selling shares.

Hopefully all will be revealed in the next few weeks, maybe as soon as the Company’s EGM on April 1st (EGM notice here).

Look for opportunities to close the negative view on Liberty International below 300p.

Click here for all Followthedirectors comments on Liberty International:

January 11th, 522p: Liberty International shares continue to be vulnerable

August 31st, 984p: Liberty International- PDMR selling

February 20th, 958p:Liberty Internationals Gordon buys shares. So what.


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.

Now that the market seems to have woken up to the risks at Brambles (BXB, 210p, A$ 4.96) from a slowdown in world trade, and pricing pressure, I’m happy to close my negative view on Brambles.

We initially warned of the downside risk in the group following a directors share sale (Craig van der Laan de Vries) in late March 2008, when Brambles were trading above 420p.

We reiterated our caution in early June, ahead of what turned out to be a dismal trading update, resulting in the shares falling 14% on the day.

And lastly, last week we highlighted caution ahead of this weeks results, following which the shares fell by 20%.

So, whilst the outlook is likely to continue to deteriorate for Brambles, we feel that the recent share price correction has been indicative of the market now having a better understanding of the risks at Brambles.

Close negative view of Brambles:

March 23rd 2008 with 48% absolute return or 20% return relative to the market,

June 2nd 2008 with 44% absolute return or 16% return relative to the market,

February 10th 2009 with 25% absolute return or 20% return relative to the market.

For all our posts please read https://followthedirectors.co.uk/?s=brambles.

Sell high, Buy low. That’s what I was taught.

This completely failed when in September I suggested that De La Rue (DLAR, 1001p) were ‘up with events’. The company declared a ‘strong order book’  and ‘operating cashflow remains strong’.

This resilience, coupled with a market meltdown in October, meant that investors were prepared to pay a premium for certainty of cashflow, hence De La Rue’s 48% outperformance against the market (September post ‘De La Rue CEO and CFO raise 1 million pounds’).

CFO Stephen King yesterday sold just under 30,000 shares at 1001p, taking his holding down to around 16,000 shares.

I’m of the belief that things can’t get any better for De La Rue, and continue my cautious stance. Also, take a look at Kings timing. He seems pretty good at taking advantage of the share spikes to optimise his share sales.

View on De la Rue: Negative

Strength of Signal: Remains STRONG

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I’m not suggesting that Carphone Warehouse’s (CPW, 108.5) CEO Charles Dunstones message of ‘dread’ to his staff prompted Non Exec Chairman John Gildersleeves share sale.

Gildersleeve did say the sale of 138,000 shares at 108.75p was ‘for tax planning purposes’ (source:London Stock Exchange). But then I suppose he would be very unlikely to say ‘because the shares are expensive’ would he?

Gildersleeve is left with 246,000 shares post this sale.

Charles Dunstones email last month to staff was aimed at reducing costs and increasing subscriber numbers. Dunstone concluded by saying

“I am sorry to have to send such a grim message, but I feel it is my duty to prepare us for the worst; everything I read and observe fills me with dread for the state of the whole global economy” (Source: channelregister.co.uk reported 16th January 2009)

I suppose we should have paid more attention to mr Dunstones partner, David Ross, who in June last year sold 15 million shares to the Carphone Warehouse Employee Benefit Trust at 217.5p (June 19th 2008 source: London Stock Exchange). I bet the employees aren’t too chuffed.

View on Carphone Warehouse: Negative

Strength of Signal: Medium

Brambles (BXB, $5.64) disappoints.  Stock falls 12%.

We warned last week of the inherent risk in these interim results, in ‘Brambles- thorny results due February 19th’. Management must have thought it prudent to release results a few days earlier than expected.

We first highlighted a negative opinion on the stock following Craig van der Laans share sale in March last year, raising GBP 700,000. Since then Brambles shares are down 41% in A$ terms, 10% points more than the AORD index. For all our comments on Brambles click here.

Bloomberg commented a few hours ago:

“Brambles Ltd.’s first-half profit dropped 28 percent, prompting the world’s biggest supplier of pallets used to move and store goods to cut operations in the U.S. and eliminate 750 jobs. Net income fell to $212.8 million in the six months to Dec. 31 from $293.7 million in the year-earlier period, Sydney-based Brambles said today in a statement.

Revenue fell 2 percent to $2.07 billion; shareholders will receive an interim dividend of 17.5 Australian cents a share. The U.S. is in the midst of a credit crisis that lies at the heart of the worst global recession since World War II. The country’s labor market has lost 3.6 million jobs since the recession started in December 2007 after companies from Wal-Mart Stores Inc. to General Motors Corp. announced payroll cuts.

“Brambles is, of course, not immune to the dramatic slowdown in key markets and our results reflect this,” Chief Executive Officer Mike Ihlein said in the statement to the Australian stock exchange. “Consequently, it is important we take decisive actions now to underpin our future performance.””

Carnival Cruise Lines (CCL, 1420p) are being squeezed.

‘The average passenger’s age is 45+’ (http://cruises.about.com), and those potential customers of Carnival are being squeezed in their spending power by falling interest rates, falling pension and savings valuations, and other pressures on them such as highlighted in Saturdays Telegraph:

“A Daily Telegraph survey – the first of its kind since the recession began – highlights the heavy toll being taken on Britain’s so-called “Babygloomers”.

Almost one in ten adults are having to contribute to their parents’ upkeep, the research found. The Norwich Union research suggests more than 1.3 million adults aged between 17 and 65 are paying their parents more than £250 each month, with some paying up to £1,000.

Many pensioners have found themselves struggling as their income from savings has virtually disappeared following the drop in interest rates. As a result, they have been forced to turn to their children for help” (Telegraph.co.uk February 14th 2009).

Carnival directors Howard Frank and Robert Dickinson were sellers back in June and August last year, raising over $4 million between them through share sales.

Peter Ratcliff, the former CEO of Princess Cruises Intl, on Febraury 2nd sold 12,567 shares at 1245p, raising over GBP 150k.

The stock since August has performed in line with the market, in my view rescued by falling oil prices. I can imagine that booking a cruise has a long lead time, so any bad news on Carnival is likely to appear later in the consumer cycle rather than sooner.

Carnival cut their dividend in November, saving over $1bn a year.

I continue with my negative view on the shares, with a ‘STRONG’ signal from directors share sales.

For all posts on Carnival click here.

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’.

sagelogo80 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

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