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Isn’t two months a long time in these markets!!
I was trying to find this post about the Easyjet (EZJ, 359p) Chairman Colin Chandlers track record in buying shares, and thought I’d written it only last month.
Now we see Andrew Harrison, the CEO, last week buying 72,000 shares at 345p, putting £250k to work. He has increased his position by more than 1/3rd so far this year, having put in another £250k in January at 424p per share.
The stock fell ( collapsed?) last week after easyjet disclosed that it would suffer from jet fuel price rises. No kidding !! What do you pay these equity analysts to do? Any conversation with the company would have revealed how far forward they were hedged, and jet fuel prices are quoted daily.
I stick to my view in January that these guys are worth following.
The Restaurant Group (RTN, 135p) keeps hitting the radar screen. This is the owner of Garfunkels, Frankie and Bennys, Chiquito, as well as many other brands and concessions, owning over 300 restaurants in the UK.
It hits the screen on director purchases, but also because these purchases are in a sector highly vulnerable to a fall in consumer confidence. And lastly, it scores highly due to the unusually high number of directors buying shares.
Five executive directors, the Non Exec Chairman, and the Company Secretary have over the last month put £400k to work in Restaurant Group shares.
Andrew Page, who was wise (not lucky, surely) enough to execrise an option and sell 650,000 shares at 351p in March last year, is now starting to buy back at less than half the price. Page has increased his position in Restaurant by about 60% over the last two weeks, buying 147,000 shares at between 140p and 147p.
Other directors who have participated in purchases are Bacon, Corzine, Morgan, Critoph, and Richardson, increasing their positions by between 15 and 50%.
Mike Butterworth, CFO, and Nick Salmon, CEO, of Cookson Group PLC (CKSN, 614p) yet again put their money where their mouth is.
Cookson on Tuesday declared in line results for 2007, with a confident outlook for 2008.
Butterworth and Salmon have been consistent buyers of the stock over the last three years. They last bought in March 2007, which prompted me to pick up some stock too. From March to October Cookson outperformed the FTSE250 by 40%. Since June 2005 Cookson were up 130% vs the FTSE250 up 60%, until October 2007. They’ve given up all this outperformance over the three months to January 2008.
The fact that Butterworth and Salmon have increased their holdings in Cookson by 90% and 45% respectively, gives me the confidence to buy some more for myself.
This is not a short term trade, ahead of news, but a longer term ‘invest alongside the management’ which has worked for me before.
Caveat: I’ve just read the statement from the company, not disclosed in the stock exchange statement, which shows this purchase to be part of the long term incentive plan. Under this plan, Butterworth and Salmon get ‘matching shares’ which means that essentially they’ve bought this stock at under 300p. So substantially lower risk to them than buying them at 590p (like you or I would have to).
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.
Robert Walters (RWA, 167p) directors, having sold 4.7m shares from March to September last year, at prices between 330p and 368p, are now starting to buy back their positions.
Robert Walters, CEO, and Giles Daubeney, COO, have this week bought 740,000 shares at around the 150p mark. Allan Bannatyne, CFO, has started a position by investing about £65,000 at the same level. See Yahoo Finance for details.
In August last year Robert Walters was ‘the subject of takeover interest from leisure recruitment specialist Berkeley Scott’ (Telegraph 21/8).
In November last year we saw directors of Michael Page (MPI) and SThree (STHR) investing quite heavily, investing £1.1m between them (see Michael Page comments).
Maybe conditions in this sector, which has a high sensitivity to economic growth, aren’t as bad as the market thinks. Or maybe expect future merger activity within the sector.
Next news Tuesday March 4th- Michael Page earnings release. Expect a comment on current trading.
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).
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