You are currently browsing the category archive for the ‘FTSE 250 company’ category.
Up almost 50% from Julys low (730p), Rathbone (RAT, 1060p) (chart) are seeing a couple of their Executive Directors take advantage of a strong share price to reduce their exposure.
Richard Smeeton has sold (on 19/9/08) 12,000 shares at 1035p taking his holding to 115,673 shares, and Andrew Morris has sold (23/9/08) 11,791 shares at 1063p, taking his holding down to 41,268 shares.
Another two directors (Ian Buckley and Richard Loader) have also sold, but in much smaller size.
These trades echo selling at Hargreaves Lansdowne (see my posts here), also up 50% from the lows, where three directors continue to sell.
Four directors selling, but not a significant portion of their holding, warrants a MEDIUM strength signal. The risks lie on the downside.
Addendum October 14th:
Further sales have been reported as follows:
Clive Hexton, on the board of Rathbone Investment Management, has sold 5200 shares at 983p taking his holding to 8700 shares (October 6th), and
Hugh Adlington, at Rathbones Investment Management London, has sold 10,000 shares at 987p, taking his holding to 44,000 shares (October 3rd).
Just as the central banks are ramping up the printing presses, and De La Rue (DLAR, 948p) declare a ‘strong order book’ and ‘operating cashflow remains strong’ in their pre close statement on September 16th, the CEO Leo Quinn and CFO Stephen King reduce their holdings substantially.
The statement reads fairly positively, but the one thing missing is any comment on costs. Maybe those haven’t been added up yet.
Stephen King, CFO, on September 18th sold 36907 shares at 920p, raising GBP 340k. These are the balance of the shares he exercised in July, having sold about 25,000 to pay the tax due. He is left with 46620 shares.
Leo Quinn, CEO, on September 19th sold 78500 shares at 948p, raising GBP 740k. This leaves him with 126,000 shares.
De la Rue looks to be ‘up with events’, having outperformed the FTSE 250 by 50% in the last year. I think King and Quinn might have a point here.
Value of directors dealings as a signal for investors: STRONG.
It seems to me as if Savills (SVS, 266p) are almost a second derivative on the UK housing market. Not only are there huge swings in sentiment on housing, but these seem to play out with greater amplitude in the Savills share price.
Of course Lehmans demise will impact the London housing market. Not only by Lehman redundancies, but also having all those other banks not paying bonuses for a couple of years: ‘you’re lucky to have a job, son’.
Savills directors dealings seem to be a pretty good indicator (or maybe influence) on the share price.
Simon Hope on Friday sold 62283 shares at 295p, taking his holding to 87,547 shares.
I’ve commented on him before (links to comments in blue), so let’s look at how the share price coincides with Directors activity in the sector, and my comments:
November 8th 2007: Hope sold GBP 350k (net of options exercise) of shares at 353p. I said Housebuilders- too early to buy.
March 10th 2008. I highlighted the ‘risk’ inherent in Savills shares ahead of results, using Hopes share sale in November as an indicator, by saying Savills up 50% this year, results Wednesday. Watch out.
August 4th 2008. We saw directors (Sir John Ritblat and CEO Izett) buying at Colliers Re, also in the agency/property management sector. As a result I said Real Estate agents – time to buy?
Now let’s look at the value of using these directors dealings as a signal for investors. I list here the dates of my comments, and the share price performance between them:
November 8th to March 10th SVS down 5%
March 10th to August 4th, SVS down 35% absolute, or down 13% relative to the FTSE 250.
August 4th to September 12th, SVS up 33% absolute, or 32% relative, but Hope didn’t announce his sale until yesterday, so
August 4th to September 15th, SVS up 23% absolute, or up 25% relative.
So what is the downside risk in Savills today then, and can this string of successful calls be repeated?
Between August 4th and today, Savills are up roughly 30% relative to Colliers Re. If you look at a longer term chart of these two stocks, they more or less perform in line with each other. Colliers is a little slower to move due to its illiquidity. So that’s what I think the scale of the downside risk is in Savills.
Also note that Savills have a pretty heavy cost base with 17,000 employees, versus Lehmans 28,000.
Value of Directors Dealings as a signal to investors: STRONG
Link to all my previous comments on Savills here.
Over a tense weekend for the 25,000 employees of Lehman, praying for a rescue package, I spot further director selling at Hargreaves Lansdown (HL., 191p).
On September 9th we saw the CFO Martin Mulligan and his Accounting colleague Tracy Taylor selling down less than 10% of their holdings.
On September 11th the Group Compliance Director Nigel Bence sold almost a third of his holdings, selling just over 250,000 shares held in his and his wifes name, to leave them with 561,207 shares.
HL were up more than 50% from their low. With equity trading volumes falling and the US heading for months of financial turmoil as a fallout from the (likely) collapse of Lehman (FT comment), I consider the risks lie substantially on the downside, and suspect Bence, Mulligan and Taylor would agree with me. As management concluded in their results presentation last week: ‘Volatility will impact profit growth’. That volatility is not yet receding.
For my last comment on Hargreaves Lansdown of September 12th ‘Volatility will impact profit growth’ see here.
With a third director selling, I now consider the value of the ‘signal’ from directors dealings to be STRONG.
Addendum Sept 24:
Further selling by CFO Martin Mulligan (sold 142k shares at 202p 19/9) and Head of Group Accounting Tracy Taylor (sold 30k shares at 200p-204p 22/9) reinforce the signal on Hargreaves Lansdown.
I’ve looked at the Hargreaves Lansdown (HL. , 190p) share price performance since the results on August 27th. The shares moved from 161p to a high of 209p, and are now off the top at 190p.
So a more than 25% uplift after a great set of results (to June 2008). Of note was an increase in assets under management, and an increase in the proportion of income that is recurring, up about 4% points to 72%.
I then looked at the slides from the analyst presentation, and recount here from the ‘Conclusion’ slide:
‘Resilient business’
‘H-L is well positioned in the market’
‘Volatility will impact profit growth’
‘….but long term prospects remain very positive’.
I also notice a comment on FT’s Alphaville quoting a Citigroup report that shows a marked slowdown in global stockmarket activity n August, down 37% in value vs last year.
And I then understand why on September 9th the CFO of Hargreaves Lansdown Martin Mulligan has taken some money off the table by selling 200,000 shares at 193p, taking his holding to 2.1m shares. His colleague Tracy Taylor, Group Accounting Director and Co Secretary, has also sold, 65,000 shares at 193p taking her holding to 932,000 shares.
Of note is Mulligans past trading activity. He sold 1.2m shares in September 2007 at between 208p-210p. HL shares subsequently fell to 135p in January.
So maybe ‘volatility will impact profit growth’ is the line to focus on for the next six months.
Signal strength: MEDIUM
Link to Hargreaves Lansdown Investor Relations site.
followthedirectors... a study of directors share dealings 