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John Jackson, Non Exec Director of The Restaurant Group (RTN, 157p), and CEO of Jamie Oliver Holdings Limited, prompted us to reiterate our positive signal on The Restaurant Group shares when he tripled his holding on October 20th by buying 200,000 shares at 104p (‘The Restaurant Group Non Exec trebles holding‘).

In March 2008 five directors invested gbp 400k, increasing their positions by between 15 and 50%. This prompted us to view the signal from director dealings as Positive, and of high value (‘STRONG’). See our March 14th comment: ‘Consumer stocks at risk? Not TRG according to directors’.

Jackson this week (May 8th) sold ALL his holding in The Restaurant Group, 300,000 shares, at 161.84p.

This share sale causes us to take profits on The Restaurant Group.

Share performance since March 14th 2008: Shares are up 14% absolute, or up 42% relative to the index (FTSE 250).

Share performance since October 22nd 2008: Shares are up 34% absolute or 10% relative.

View on The Restaurant Group: Negative

Strength of Signal: Medium

For all comments on The Restaurant Group click here.

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

Heritage Oil (HOIL 337p) gushed 26¾p to 338p following a positive drilling update from the Kurdistan region of Iraq. It is the first-ever well to be drilled on the Miran licence in the region and testing is anticipated to take up to one month to complete’ (thisismoney.co.uk, market report 25 march 2009)

Oman holdings sold for $28m (Company announcement today April 8th) “This transaction demonstrates Heritage’s strategy of realising value for shareholders within the portfolio” Tony Buckingham, CEO.

In the last couple of weeks we’ve had a positive drilling report, and disposals realising value to be reinvested in core assets, yet Heritage Oil shares are trading at 337p, down a couple of % today. News in the price? Time to take profits?

Heritage Oil are up 33% absolute, and up 79% relative to the FTSE 250 index since our comment on September 21st 2008.

We said then that we had noticed two non exec directors Michael Hibberd and Gregory Turnbull buying 50,000 shares each on 5th September at 215p and 212p respectively.

Hibberd followed this up with a further purchase of 75,000 shares at 182p on September 16th, taking his holding to 300,000 shares. Hibberd must have believed Heritage Oil shares to offer value to invest around 250,000 pounds and almost double his holding.

For full comments on Heritage Oil see September 21st :  ‘Non execs build equity positions in Heritage Oil (HOIL)’

I’m happy to take profits here in light of the positive news, and the stalling share price.

View on Heritage Oil : Neutral

Caveats:

Cazenove comment as reported on FT Alphaville March 25th: ‘At 311p, Heritage is trading at a 23% premium to our core NAV. At these levels, a certain amount of bid speculation and exploration success is priced in. However, given the potential upside from a successful flow test in Kurdistan and the company’s takeover appeal, we remain with our OUTPERFORM recommendation’

Evolution comment as reported by FT Alphaville  on the same day: ‘VALUATION AND RECOMMENDATION – On 3rd March we wrote that we thought Kurdistan was a free option in Heritage’s share price with little downside risk if exploration failed. The downside appears to have been eliminated. Our old target price of 400p included a risked upside of 123p for the Miran structure based on 500m boe of recoverable reserves. Following today’s news we are raising our target price to 500p to reflect the success and the potential upside to our reserves assumption’

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.


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.

logo_cpw1

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.””

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

Miguel Ramis, Compass’ Head of European Operations, not a board director, but an individual of PDMR (person with direct management responsibility) has sold 120,000 shares at 355.89p leaving him with 548,000 shares (London Stock Exchange February 6th 2009).

Compass Group (CPG, 355p) have been a wonderful outperformer relative to the market, up 50% since we turned positive on the shares on March 18th (‘followthedirectors: The Compass points North‘) as a consequence of share purchases by Roy Gardner the Chairman, and Richard Cousins the CEO.

If you remember, the market had concerns over food price inflation, and whether or not Compass would be able to recover increased costs in their contracts.

The company statement announcing Ramis’ share sale describes him using the proceeds ‘used in repect of settlement of the specific lending obligations‘.  Doesn’t that mean he’s paying down a loan?

I interpret this as a lame excuse for his share sale, and I am happy to take profits on shares bought in March at 309p, a performance 50% better than that of the FTSE 100 index.

View on Compass Group: Negative

Strength of Signal: Medium

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