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I see Paul Walsh, CEO of Diageo (DGE 1055p) has sold just under a million pounds of shares, resulting from an options exercise the same day.
Looking back, he always sells pretty much all the shares he receives as a result of exercising his options, not just a portion sufficient to pay the tax, so behaviourally this is no change from previous sales.
What I did notice though is that he has been very clever at hitting all the peaks in the Diageo share price chart over the last two years.
To best see this, go to digitallook.com, search for diageo, draw a chart, and overlay directors dealings.
The chances are that he’s done it again this time, and 1055p may well be the recent peak of Diageo for a few months.
Brambles Ld (BXB, 424p) has a secondary listing in London, and a primary listing in Sydney. I noticed a director selling £702k of shares, way down from the high, and wonder if this is a result of a slowdown in revenue at the group.
Brambles directors have been buying through 2006 and 2007, at prices between 506p and 557p in 10s and 20s (thousands of shares). The stock peaked in October 2007 at 650p. Then, last week, Craig van der laan de Vries, ‘Group President of CHEP Asia Pacific’ sells almost 20% of his holding, 160,000 shares at 440p, raising £702,000.
What does he know that we don’t know? Hazard a good guess.
With 83% of Brambles revenues from CHEP, the global ‘bluepallets’ people, with sales split 44% Americas, 43% Europe, and 13% Rest of World, these guys have significant exposure to a slowing economy.
But then there could be 4% of the company coming to market pretty soon (see smh comment here).
The last news release was the interim results on Feb 21st, so don’t expect anything soon. But still I do find this a curious move by a director of the group, and as a result I believe that the risks from here forward lie on the downside.
I was just looking at the forthcoming news, and see that Savills (SVS, 344p ) have their results this week (Wednesday March 12th).
A pretty non committal trading statement in January, and decent performance by the Real Estate sector (Savills classified by FTA as Real Estate) mean that this stock has been a great performer. Savills are up around 50% from their January lows, and have also outperformed Taylor Wimpey by 50% since the turn of the year.
I warned that it was too early to buy the housebuilders when I saw a director at Savills selling down his position in November at 353p. But I really now believe that any news this week from Savills is likely to be negative for the share price.
No matter what they say about global reach, 80% of operating profits come from the UK. And did you know that they have more than 17,000 employees ? Yes, a large chunk of costs will be commission (1/3rd of total staff costs), but 17,000 people is a heavy cost base to manage when things are turning down.
Another thing. Savills financial results didn’t seem to have any gearing to the upside when revenues were rising (revenues up 34%, operating profits only up 10% at June 2007 interim results) which means costs (staff costs up 35%) have been rising as fast as revenues. So watch what happens when revenues start falling.
Sources:
Savills H1 results presentation: http://ir.savills.com/savills/finnews/reports/interim07pres/interim07pres.pdf
Google Finance: http://finance.google.com/finance
Digitallook.com: http://www.digitallook.com/
For all articles on Savills published on followthedirectors click here.
PayPoint (PAY, 600p) gets a good rap from Questor, and the market.
So why then are directors selling big chunks of stock?
This week PayPoint Chairman Anthony Newlands raised £1.74m selling virtually all his shares,
CEO Dominic Taylor sold £2m worth, over a fifth of his holding, leaving him with £7.3m in the company, and
Executive Director Tim Watkins – Rees in December sold a fifth of his holding, leaving him with £3.8m in the company.
On Feb 14th the company issued a reassuring update statement, but I’d be concerned about the growth rate slowing down in the longer term.
So maybe I’d do the same, sell about half my holding (the very rough average % of the directors sales above).
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.
Fabiola Arredondo clearly believes in this story. Enough to commit to Experian (EXPN, 414p) a further £232k last Friday at 416p, on top of £176k invested at similar levels back on the 16th and 20th of November.
I said in my post on Experian of 29/11 that I would like to see Fitzpatrick, another non exec, committing more capital. Maybe last Wednesdays investment of £86k by non exec Alan Jebson makes up for that.
To summarise then, we’ve seen four non execs commit a total of just shy of £1.1m to Experian shares in the last three weeks, at between 410p and 431p.
My sunburnt nose tells me there’s a very nice story developing here, and I’m off to buy some EXPN for myself.
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