Rathbone private client managers sell down holdings

September 25, 2008 in Directors selling, FTSE 250 company, MEDIUM signal | Tags: , , | 1 comment

 

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).

RBS directors start to exit (from rights shares)

September 24, 2008 in Directors selling, FTSE 100, WEAK signal | Tags: | Leave a comment

Over the last couple of weeks w’ve seen two directors selling shares in RBS (RBS, 214p):

Non exec Lawrence Fish sold 140,000 shares at 223.36p on September 22nd. This takes him to 182,309 shares. He had bought 119,000 shares in the June capital raising at 200p per share.

General Counsel and Group Secretary Miller McLean sold 60,000 shares at 248p on September 10th. He bought 526,000 shares in the June offer.

McLean owns over 1.3m shares in RBS, and Fish was recently apponted a non exec in May this year, having previously held an Executive position.

Are these share sales significant? Not yet.  

Find other posts on RBS here.

What’s going on at Reckitt? Becht selling, de Groot buying.

September 24, 2008 in Directors buying, Directors selling, FTSE 100 | Tags: | Leave a comment

I wondered why Rob de Groot, EVP at Reckitt Benckiser (RB., 2724p) had been buying so aggressively (GBP 3m+ in last two weeks) whereas Bart Becht has been selling.

If you look through the Annual Report, you’ll see that it is group policy for senior management to hold shares, thereby aligning themselves with shareholders. EVPs have to own 200,000 shares before they get any options or performance awards. 200,000 shares is a lot of $$, over GBP 5m at current prices. De Groot was appointed to EVP position in July 2008.

Just imagine how the attitude to risk would have changed if you had had to do that at Lehman, Bear or Merrill !!

Bart Becht has been selling down his exercised options. He exercised 600,000 options in June, and has sold 200,000 shares since. I’m sure he has more to go.

Neither of these sets of transactions can be used as signal on which to predict future share price performance.

Ex Chairman of Axis Shield buys at high prices

September 24, 2008 in Directors buying, FTSE Small Cap, MEDIUM signal | Tags: | 1 comment

Axis Shield (ASD, 307p) (website) is an old favourite of mine. I met the company, and at the same time noticed directors buying in Spring 2005 at prices almost double where they were a year earlier. The stock then continued to perform, moving up 50% within months.

Now I see that Erik Hornnaess, a non exec director but previously Chairman of Axis before their merger in 1999, has been buying shares which have outperformed the market by 40% so far this year.

Between September 3rd and 15th, Hornnaess has bought 20,000 shares at 320p, taking his holding to 125,961 shares. Four of his colleagues had earlier this year (January to April) also bought shares, all around the 270p level. They are Keen (non exec Chairman), McAndrew (previously non exec Chairman), Hermansen (CFO) and Gilham (CEO).

Signal strength: MEDIUM

This is a small cap company with a market cap of only GBP 150m. Be patient and you will be rewarded.

Weekly review, and a question for you.

September 21, 2008 in Weekly review | Tags: , , , , , , | 2 comments

Wow. Aren’t you exhausted? What a week that was. Thrilling too. You never knew what was going to come at you next!

Question for you:   How can I improve my commentary on directors dealings, or change the layout of these pages so that the information is more easily accessible by you. Please type your comments and any other suggestions or questions you may have in the ‘COMMENT’ box below. I very much value your feedback.

To skip straight to my commentary on each company type the stock name in the ‘SEARCH’ box to the left of here.

We’ve seen a few sells this week. Stocks worth noting for directors selling activity are Savills (SVS), De La Rue (DLAR), and Hargreaves Lansdown (HL.).

Savills (SVS) directors have been a pretty good signal for future share price performance, but the disclaimer must be ‘the past is no guide to the future, you can lose everything in the stock market’. On the positive side availability of capital should lead to some pick up in activity in real estate, on the negative side look at Savills huge cost base.

Hargreaves Lansdown (HL.) directors say ‘Volatility will impact profit growth’. CFO and Head of Accounting have been selling.

De La Rue (DLAR) CEO and CFO both sold this week, taking profits in a stock which is up 50% relative to the FTSE 250 index. Maybe the good news is all in the price.

On the buy side:

Shire (SHP) directors have been consistent buyers. They have a track record. And five of them are buying. Definitely worth a look.

New World Resources (NWS) fall of 50% in the last three weeks has prompted a number of directors to buy. This coal miner and coke producer is, of course, highly vulnerable to a slowdown in economic activity. The directors seem to be more confident than the stock market.

Heritage Oil (HOIL). We’ve seen a number of buyers in small oil companies over the last two to three weeks, including ROC, Arawak, Heritage, and Serica. This may signal a support level for the energy sector.

And what about Prudential (PRU)? Mark Tucker CEO invested GBP 100k on Monday 15th September at just shy of 500p. He bought 20,000 shares taking his holding to 1.5m shares. I don’t interprete this transaction to be a valuable signal as

  1.  
    1. Only Tucker is buying, no other directors, and
    2. This is a tiny increase in his existing holding. 

Granted, he is up 20% on GBP 100k in a week. Time will tell.

Enjoy the week ahead. Keep calm and think of the long term.

Non execs build equity positions in Heritage Oil (HOIL)

September 21, 2008 in Directors buying, FTSE 250 company, MEDIUM signal | Tags: | 1 comment

See also April 8th comment- closing positive view with 79% relative return.

Almost every time I’ve looked at directors dealings over the last few weeks I spot a small resources company. This time it is Heritage Oil (HOIL, 253p).

Heritage initiated a London listing in April this year, trading around the 300p mark, before heading up to a high of 350p in June and a low of 190p in August.

Non exec directors Michael Hibberd and Gregory Turnbull each bought 50,000 shares 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 125,000 shares (plus options on 1.15m shares). Turnbull now holds 350,000 shares (and options on 600,000).

Good news? Each investing GBP 100k-250k. Two directors. decent percentage of existing (Hibberd new position and Turnbull 17%). But I’d like to see more directors buying for this to get a ‘STRONG signal’ rating.

Signal strength: MEDIUM

Currency printers cash in – De la Rue CEO and CFO raise 1 million pounds

September 21, 2008 in Directors selling, FTSE 250 company, STRONG signal | Tags: | 1 comment

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.

New World Resources – 5 directors buy at 50% of Junes share price

September 21, 2008 in Directors buying, STRONG signal | Tags: | Leave a comment

New World Resources (NWR, 900p) is a Czech and Central European coal miner, producing coking coal and thermal coal.

NWR has a secondary listing in London, and caught my attention last week when two directors bought GBP 30k-40k each at above 1050p. They were followed this week by three more, investing GBP 35k to GBP 250k each, a not inconsiderable sum, at prices between 718p and 940p.

The stock has halved since they produced interim results at the end of August (link to company website). I shalln’t [how do you spell this word] attempt to analyse the results, but the main two points were a huge jump in operating cash flow (172%) due to prices, and a big jump in costs (15% underlying).

Conclusion: Five directors buying (2 execs, three non execs), good size (GBP 35k to 250k), and a significant increase in shareholding (25% to 100% of existing holding) warrant a STRONG signal.

Risk factors include: secondary listing in London, relatively recent IPO (May).

For the official announcements of directors dealings in NWR go to the London Stock Exchange ‘Market News’ website, and type ‘NWR’ in the ‘name/code’ box.

Savills – further to fall – Directors sell

September 16, 2008 in Directors selling, FTSE 250 company, STRONG signal | Tags: , , | 1 comment

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.

Shire- Mott doubles holding- five directors bought in last three months

September 15, 2008 in Directors buying, STRONG signal | Tags: | Leave a comment

I want to revisit Shire (SHP, 911p).

In February David Mott, a non exec with a great pedigree, initiated a position in Shire by investing GBP 150k, saying ‘Shire is one of the most interesting companies in the industry with an impressive recent track record of launches and an equally exciting pipeline’ (see ‘David Mott- puts his money where his mouth is‘).

Last Thursday, Mott committed almost the same amount of cash again, doubling his holding to the equivalent of 30,000 ordinary shares in Shire, by buying 5,000 ADS at $48 (equivalent to buying 15,000 ords at 910p).

I also find other recent purchases:

August 6th Graham Hetherington, CFO, buys 4000 shares at 896p taking him to 56,000 shares.

August 5th Matthew Emmens. Non exec Chairman,  exercises options on almost 40,000 shares at an average price of around 430p. He would normally need to sell roughly 40% of these shares to pay for the tax liable, but is not doing so, so I consider this transaction to be a net investment by Emmens.

August 1st Michael Rosenblatt, Non exec,  bought 1155 shares at 800p

June 13th Aungus Russell, CEO, bought 6000 shares at 804p

If I then look back further to see if directors have historically bought and sold at the ‘right’ times, and I find the following:

I see directors were buyers at 868p to 888p level in September 2006.

Then from November 2006 to September 2007 they were net sellers (exercised options and sold almost all the shares) in range of 1056p to 1270p (shares peaked at 1310p in August 2007)

And now they are buyers again, as from February this year, in range of 804p to 998p (shares troughed at 745p on July 16th).

With the observation of ongoing buying activity in decent $$ amounts, as well as having several directors buying over a short period, I believe the ‘signal’ given by directors dealing activity in Shire Ltd should move from WEAK to STRONG.

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