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International Personal Finance (IPF, 137p) is an emerging markets small loans provider to 1.8m 
customers : ‘We pride ourselves in providing home credit in a responsible well managed way. We provide, small, unsecured cash loans – typically sums equivalent to £200 – borrowed over a short period of between six months and two years'( Company website).
International Personal Finance KNOW THEIR CUSTOMERS which must be unusual nowadays, and something the US mortgage providers and banks wished they’d stuck to. You would therefore have to assume that they knew exactly what was going on in terms of default risk and loan performance.
So it is interesting to see the Non Executive Deputy Chairman Ray Miles doubling his holding by buying 100,000 shares yesterday at 135.7p, taking him to a holding of 211,000 shares.
Following an Interim Trading Statement on October 22nd, the Executive Chairman Christopher Rodriguez bought just over 30,000 shares at 163p taking his holding to 218,562 shares, and a Non Exec Director Nick Page doubled his holding by buying 24,539 shares at 163p. Charles Gregson, another Non Exec, bought 6350 shares at 157p to take his holding to 58,000 shares.
The next catalyst on IPF is probably the pre close statement in mid December. Last year this was on December 12th.
View on Internatioal Personal Finance: Positive- directors buying shares.
Strength of Signal: Strong- Four directors buying, significant increase in shareholdings, near term catalyst.
Addendum Dec 11th 11.50am: Stock is up 10% today. I know of no new news, but then I wouldn’t as I am not ‘in the market’. A look at the company website shows that the pre close update is scheduled for December 17th, next Wednesday. This is likely to be a significant positive catalyst in view of the directors buying activity mentioned above.
On October 14th I posted the following article ‘Are directors buying shares?’, prompted by your questions.
‘As at October 10th the number of companies in the FTSE 350 indicating net directors dealings over GBP 50k over the period I asked for (1, 3 and 12 months) were as follows: 1 month to October 10 2008: 26 companies showed net selling over a cumulative GBP 50k, and 32 companies showed net buying. 3 months to October 10th 2008: 58 companies showed net selling, and 54 companies net buying 12 months to October 10th 2008: 144 companies showed net selling, and 130 companies net buying.’
I’ve just run the Digitallook screen again, and find that over the past month, to today, companies in the FTSE 350 which exhibit cumulative director share dealing activity greater than GBP 50k are as follows:
6 companies show net selling, and 59 companies show net buying.
Over the past week, the screen shows 3 companies showing net selling, and 18 companies showing net buying.
This indicates that Buyers outnumber Sellers by between 6:1 and 10:1.
A very powerful signal that company directors think shares are cheap.
I guess valuation has something to do with it. The FTSE 100 is roughly 10% lower, and the FTSE 250 very roughly 20% lower over the one month period (compared to the one month to October 10th). Anecdotally most of the buying activity has occurred in FTSE 250 stocks.
For followthedirectors comments on companies exhibiting director buying activity click here (This is not a comprehensive list, but companies that we believe warrant comment).
For other general market commentary see Market Musings here.
For the excellent Digitallook screening tool go to Digitallook.com
Five Executive directors at GKN plc (GKN, 126p) have bought 386,000 shares between them this week, increasing their shareholdings in the group by 75% to around 896,000 (Source: London Stock Exchange).
Those directors are:
CFO William Seeger, CEO Sir Kevin Smith, CEO of Powder Metallurgy Andrew Smith, CEO of Aerospace Marcus Bryson, and CEO of Automotive Nigel Stein. It’s particularly encouraging to see Stein investing here, in view of the recent profit warnings from the car makers globally.
Stein bought 84,000 shares at 100.5p on October 28th, taking his holding to 209,000 shares.
Andrew Smith and Marcus Bryson were sellers near 330p in August 2007, so buying shares at 109p must feel good. Unfortunately CEO Sir Kevin Smith was not quite so savvy. He paid 360p in March 2007.
So GKN join the merry band of UK Engineering companies exhibiting director buying activity: Weir Group, Bodycote, John Wood, Senior and IMI.
See ’25 Directors buy shares in UK Engineering Companies’ (October 28th followthedirectors.co.uk)
View on GKN: Positive- Five directors buying shares
Signal Strength: STRONG- Five directors buying, investing GBP 400k between them, increasing holding by 75%
‘Bodycote (BOY, 118p) is the world’s largest and most respected provider of testing and thermal processing services: Heat Treating, Hot Isostatic Pressing, Metallurgical Coatings and Testing – operating in 30 countries’ (strategy page on co website).
Four directors have bought shares in the last two months, and the CEO has exercised options over 148,000 shares (at a premium to todays price).
Between them and a PDMR they have bought around 132,000 shares in the market, and 148,000 shares via the options (CEO), investing over GBP 400k. Purchases and options exercises have been made between 114.88p and 206p over September and October 2008 (source: London Stock Exchange Market News website, type in BOY for all Bodycote news)
Why?
April 2007: Bodycote rejects fourth takeover bid from Sulzer (Times 20th April 2007) (stock reached high of 325p in March 2007)
October 2008: Bodycote announces completion of sale of Testing business for GBP 417m (October 17th 2008, company website)
Today: Bodycote shares now trading at 118p and have a market cap of GBP 380m.
Do you think Sulzer might come back for Bodycote? I don’t know Sulzers strategy or their financial position. Maybe you should ask somebody that does. But the directors clearly believe, as shown by their actions, that Bodycote shares are cheap.
View on Bodycote: Positive- Directors buying
Strength of Signal: Very STRONG. 5 out of 6 directors buying shares, significant $$ investment, company has a history of bid activity.
See also ’25 directors buy shares in UK engineering companies’ (October 28th followthedirectors.co.uk)
Laird plc (LRD, 150p) ‘provide technology for an increasingly connected world’ in the form of Electronic Components and Antennae enabling wireless connectivity (see co website for the lowdown).
They last declared results at the end of July for the June half year, showing an operating cash flow of GBP 28m for the half year (or GBP 12.9m after tax and financing). For a company with a market cap of GBP 270m that looks pretty good (co slide presentation here).
On October 21st Laird issued an interim management statement, the key points of which we saw as ‘we continue to match our direct labour to changes in demand’ and ‘Laird remains extremely strong with low financial gearing and double-digit interest cover’ (full statement here).
In March the executive directors Hill, Silver and Rapp all exercised options and sold roughly the required amount to pay tax, at 494p per share.
In the last week four directors , including Peter Hill (CEO) and Jonathan Silver (CFO) above have been buying shares as follows (source London Stock Exchange):
22nd October :
Christopher Hum, non exec, buys 1512 shares at 161.675p per share taking his holding to 3000 shares.
Jonathan Silver, CFO, buys 20,000 shares at 167p per share, taking his holding to 210,000 shares
23rd October:
Peter Hill buys 18,000 shares at 156.36p, taking his holding to 200,000 shares, and finally
24th October:
AJ Reading, non exec, buys 3000 shares at 147.25p per share, taking his holding to 15,000 shares.
What do we think?
1. Four directors buying shares, mix of non exec and exec, shows confidence in the current half year performance of the group.
2. The size of purchases is however in three cases only 10-20%. I’d love to see a greater commitment.
3. Buying in times of huge uncertainty in the market is worth more to us as a signal than buying in stable times.
View on Laird: Positive- four directors buying
Significance of purchase: High/Strong– four directors buying in times of turmoil, four months into the half year.
See also ’25 directors buy shares in UK engineering companies’ (October 28th followthedirectors.co.uk)
followthedirectors... a study of directors share dealings 
