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September 12th: Simon Hope, Savills (SVS, 205p) Executive Director with responsibility for Capital Markets, sells 62283 Savills shares at 295p, taking his holding to 87,547 shares and raising GBP 183,797.
September 16th: followthedirectors comments: ‘Savills – further to fall – Directors sell’
October 17th : ‘Savills Says Earnings Will Miss Analysts’ Estimates’ (Bloomberg article) : ‘this year’s pretax profit will miss analysts’ estimates because of the slump in transactions caused by the credit-market turmoil.’
I know that in these markets five weeks is a lifetime, but do you not think the board of Savills have had regular discussions about the risk to their profits and earnings in their weekly board meetings?
If you had followed Savills directors dealings and the followthedirectors commentary, then this news would be no surprise to you.
Find below the performance you might have achieved if you had followed our commentary (I list here the dates of my comments, and the share price performance between them):
November 8th (followthedirectors say ‘don’t buy’). Performance to March 10th SVS down 5%
March 10th (‘results wednesday, watch out’) Performance to August 4th, SVS down 35% absolute, or down 13% relative to the FTSE 250.
August 4th (‘time to buy?‘) to September 12th, SVS up 33% absolute, or 32% relative, but Hope didn’t announce his sale until yesterday, so use August 4th to September 15th, SVS up 23% absolute, or up 25% relative.
September 16th (‘further to fall’) to today October 17th, SVS down 23%, but up 5% relative to the FTSE 250.
I would suggest that the risk in Savills remains distinctly on the downside.
For all comments on Savills click here or type Savills into the search box on the left.
On September 26th in ‘ITV directors dip their toes in the water- add to watchlist’ I noted purchases by three directors/senior managers at ITV (ITV, 39.5p) . I wanted to see further purchases before I bought the shares.
Over the last fortnight two non execs have also bought shares, in limited size, taking the number of directors buying shares to five.
Heather Killen, non exec, on October 1st bought 22,000 shares at 43p, initiating a position, and on October 9th Agnes Touraine, also a non exec, bought 100,000 shares at 37.5p.
Although these are relatively small purchases in $$ terms, it should be noted that all the five directors who have purchased shares (Griffiths- CFO, Fincham- Director of Television, Russell- Deputy Chairman, Killen- non exec, and Touraine – non exec) have initiated positions in ITV in the last month.
As a result of this, and the number of directors buying shares, the recent transactions act as a STRONG signal to investors.
View on ITV: POSITIVE- Directors buying shares
Strength of Signal: STRONG
Link to all comments on ITV.
On April 25th we saw Samir Brikho, CEO of Amec (AMEC, 525p), increasing his holding by 50% and investing close to GBP 500k ‘Amec– a difference of opinion CEO buys, CFO sells.’
On Friday October 10th Brikho bought a further 50,000 shares at 497p, investing GBP 250k, taking his holding to 232,000 shares.
Other directors have also been active:
October 7th Non executive Tim Faithfull buys 5000 shares at 533p, doubling his holding to 10,000 shares, and
October 8th, Jock Green-Armytage, Non executive Chairman, increases his holding by 50% by buying 5000 shares at 509p.
Also in September Ian McHoul, the new CFO, bought 9000 shares at 746p to take his holding to 60,000 shares.
In the three months after Brikhos April 25th purchases, Amec outperformed the FTSE 100 by 30%. They have now given up all that outperformance against the index, and with the share price near 500p represent another opportunity.
View of Directors dealings: Positive signal with three directors buying in the last week.
Strength of signal: Remains STRONG
For all Amec comments click here.
My last post listed companies selected so far this year for a high level of conviction (or Strong signal) in directors buying shares.
Below I list companies selected so far this year for directors SELLING, where I believe the actions of the directors to be a STRONG signal for investors.
Those companies are as follows (for full comment type the stock name into the ‘SEARCH’ box to the left):
De La Rue (DLAR)
Savills (SVS)
Hargreaves Lansdown (HL.)
Carnival (CCL)
3i (III)
Connaught (CNT) (switch into eaga)
Cairn Energy (CNE)
Tempus on Wednesday declared that ‘Tate and Lyles share price caning is an opportunity to buy back in’, after the share price fell 10% over the judges decision of a patent case on sucralose.
Clearly management at Tate and Lyle (TATE, 384p) agree with Tempus. Six directors bought shares at just over 380p on Wednesday and Thursday this week, investing just under GBP 30k each on avearge, and increasing their holdings by an average of close to 60%.
Directors have been active at prices between 380p and 440p since October last year, taking the total number of directors (exec and non exec) buying shares to seven out of a board of 10, a significant proportion.
I’d love to see a bit more cash committed by directors, but in light of the consistent buying over the year, the % increase in holdings, and the high proportion of the board participating, I believe these share purchases to be a STRONG signal.
Signal strength: STRONG
For details of directors activity see www.digitallook.com, type in TATE, and choose Director Deals tab.
followthedirectors... a study of directors share dealings 