‘Too cautious’ Daniels buys into Lloyds shares

August 4, 2008 in MEDIUM signal | Tags: , | Leave a comment

Eric Daniels, CEO of Lloyds TSB Group (LLOY, 300p) has decided to step up to the plate by investing almost £300,000 of his own money in Lloyds shares.

Daniels on August 1st increased his position in Lloyds TSB by about 27% by buying 100,000 shares at 296.5p, taking his holding to 473,000 shares. For a great article on Daniels and Lloyds success in dire market circumstances read this article, published in the Telegraph today (link here).

Daniels colleague, Chairman Victor Blank, has invested roughly the same amount, buying 100,000 shares at 294p, increasing his position by 50% to 300,000 shares.

Despite Daniels making £2.7m a year (source : Daily Telegraph) I consider these moves to be significant, especially if Daniels is a ‘cautious’ individual. I would like to see more puchases, from Daniels and Blank, and hopefully other board members, to reinforce this signal.

At the moment the signal strength rates as MEDIUM.

Lalani – CFO of BT invests £100k

August 4, 2008 in WEAK signal | Tags: | Leave a comment

It was reported to the London Stock Exchange that the Finance Director of BT Group (BT.A, 171.3p) Hanif Lalani, had bought 58,515 shares in BT at 170.90p, investing £100,000.

Although this increases Lalanis position in BT by more than 50% (to 169,812 shares) I view this move as being of little use as a signal to investors.

1. Lalani is acting alone amongst the board members in buying BT shares. A stronger signal would be generated by other board members buying.

2. £100k is not significant in the context of Lalanis income, and probably not in terms of his net wealth either. Hanif Lalanis income including benefits but excluding any ratchet on his deferred bonus plan amounted to £1,076,000 last year (source: BT 2008 annual report).

Rexam directors buying – need more for a positive signal

August 4, 2008 in WEAK signal | Tags: | Leave a comment

Following first half results which were better than expected ( see Questor article of 31/7 here), Rexam (REX 376p) directors have started to buy again.

Chairman Peter Ellwood has doubled his position to 20,000 shares, investing £38k at 380p. His colleague Bill Baker, and Executive Director of Rexam, has increased his holding by 20,000 shares to 194,000 shares, by investing £76k.

In mid December 2007 Rexam issued a profit warning which sent the shares down by 20%.

Eight directors of Rexam subsequently bought shares at between 410p and 435p, increasing their holdings by an average of 70% each. The shares rallied to 480p over the next five months, outperforming the FTSE by 20%.

For me to be convinced, I need to see the board of Rexam as committed now as they were back in December. These small purchases by Ellwood and Baker do not make the grade.

PureCircle up 20% in a week since non exec bought £162k worth

August 2, 2008 in Uncategorized | Tags: | Leave a comment

I suggested in my note of July 25th that maybe the non exec purchase of £162,000 worth of shares in PureCircle (PURE, 241p) was a positive signal ahead of forthcomong Interim results in mid September.

It seems that the news came sooner than that, in the form of a major deal with Pepsico and Whole Earth for PureCircles artificial sweetener Reb-A (news announcement on PureCircle website here).

I might also suggest that the news was well known before it had been announced, as reflected by the 20% rise in PureCircle shares over the preceding 5 days.

Barclays directors [lukewarm] purchase in placement at 282p

July 30, 2008 in Directors buying, FTSE 100, WEAK signal | Tags: | Leave a comment

I’ve not a lot to say about the Directors of Barclays (BARC, 335p) buying in last weeks placement at 282p, except to say that

1. I can imagine that there must have been a lot of internal pressure on the directors of Barclays to subscribe for shares in the placement, and given that pressure, an increase in their personal holdings of Barclays shares of between 15% and 23% doesn’t seem to me particularly, how shall I say this, convincing.

2. I looked back through recent directors trades, and see in particular that Bob Diamond in March 2008, having exercised and been delivered shares in various incentive and award schemes, sold 974,000 shares at prices of 454p (4/3) and 461p (12/3) to ‘satisfy withholding liabilities’ *. I find it an intriguing coincidence then that he buys [back] almost the same amount, 1,025,000 shares at 282p last week.

* ‘satisfy withholding liabilities’ = pay tax. This is normal routine behaviour when share options are exercised or released to directors.

Marks and Spencer – Chairman David Michels adds to holding

July 30, 2008 in Directors buying, FTSE 100, WEAK signal | Tags: | 1 comment

On the 29th of July we saw the Chairman of Marks and Spencer David Michels (MKS, 257p) add to his holding by buying 47500 shares at 248.75p.

Is this significant ? NO.

1. This is a relatively small amount of money (£118,000)

2. No other directors are buying shares at the moment. The last significant purchase was in January by Stuart Rose, who invested £1m at 411p.

Misys – Directors continue to buy- in size

July 30, 2008 in Directors buying, FTSE 250 company, STRONG signal | Tags: | 1 comment

I noted on Match 31st that I had seen significant buying by the CEO, CFO and Chairman of Misys (MSY, 172p). (link to note of 31/3 here). Misys are up more than 35% relative to the FTSE250 index since March 31st, fuelled recently by some outstanding results and a positive outlook (July 24th comment by Reuters here).

Yesterday we saw Dominic Cadbury, the Chairman of Misys, reinforcing his beliefs by investing £617,000, a sizable amount in anybodys money. He bought 380,000 shares at 162.5p, to more than double his holding to 655,000 shares.

It wouldn’t surprise me to see other directors follow suit shortly.

This move strongly reinforces my comments of March 31st.

PureCircle non exec buys ahead of interim results

July 25, 2008 in Directors buying, WEAK signal | Tags: | 1 comment

PureCircle (PURE 205p) manufacture sugar substitutes from a plant called Stevia.

I was drawn to the company by the disclosure on July 1st ( see http://www.purecircle.com) that a non exec Olivier Maes, had spent £162,000 buying 80,000 shares in PureCircle at 203p.

PureCircle subsequently announced a date for their Interim Results, September 17th.

PureCircle were listed on Aim in December at 170p.

I think £162,000 is a large initial position to take for a non exec, and look forward to seeing what news the Interim results bring.

Tiffany opens in Perth WA – Mining boom at its peak?

July 25, 2008 in Market musings | 1 comment

Once described as ‘inhospitable and unsuitable for the agriculture which would be needed to sustain a settlement’ ( Willem de Vlamingh, 1697), Perth Western Australia yesterday was the latest city to boast a Tiffany store.

Is this a sign of the peak in commodity prices and the global mining boom?

(The thoughts of a ‘aren’t commodities cyclical’ cynic)

Stagecoach – CFO Griffiths thinks it’s time to take profits

July 24, 2008 in Directors selling, FTSE 100, MEDIUM signal | Tags: | 1 comment

Griffiths

Griffiths

Martin Griffiths, CFO of Stagecoach (SGC 275p) is taking his money off the table.

As at the beginning of June he held Executive Share Options over 479,000 shares, with varying exercise periods, starting in June and December 2006 and December 2007, and extending mostly to June 2010, with some as far out as December 2011 (Annual report).

Griffiths exercised all 479,000 between 26th of June and 8th July this year, which cost him £365k.

He sold all of them them on the same dates, realising £1379k, a net £1m in his pocket.

Why do I think this significant?

  • He had another 2-3 years before he needed to exercise these options, but chose to exercise and sell now.
  • This 479,000 shares is the total amount in his Executive Share Option pot*. Griffiths today owns less than 20,000 shares.
  • When exercising options, directors usually sell sufficient to pay the tax man and hold on to the rest. Not in Griffiths case. He has exercised and sold the lot.

Griffiths behaviour and the subsequent risk profile of his remaining ‘Plan’ shares indicates to me that the risks to the Stagecoach shares outweigh the medium term returns. So I’d follow Griffiths and take some money off the table too.

*Griffiths also owns 166,000 in the Executive Pension Plan (vestable mid ’09 and mid ’10), and the equivalent of 675,000 in the Long Term Investment Plan, but these are subject to Total Shareholder Return criteria as detailed in the Annual Report, and designed to be taken in cash not shares, so you may not find out whether they have been exercised until the next Annual Report.

References:

Stagecoach Annual Report 2008, pp 35-38

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