‘actions speak louder than words’- my personal thoughts on UK directors share dealings
In my post of March 6th: ‘3i CEO Philip Yea buys back £1/2m worth of shares’ I commended Philip Yea for his expertise in trading in his own company stock, 3i.
Note now that on July 14th Yea sold 60,831 shares at 823.5p, taking £500k off the table, leaving him with a residual 275,000 shares.
From March 6th to date 3i (III, 930p) are up 22% relative to the FTSE 100.
Time to take profits then. Thankyou Philip.
At 52p this time last year the Telegraph tipped Ennstone (ENN, 27.5p) as a possible bid candidate. It compared the valuation of Ennstone, the ‘last London listed aggregates company left in Britain’ with the then recent acquisition of Hanson at 12.5x ebitda (vs Ennstone at the time at 8.5x ebitda).
They went on to comment that ‘Altium, the house broker, estimates that the share price is only marginally above the company’s underlying asset value.’ (link to Telegraph article of 26/5/07)
For me Ennstone shares right now stand out by trading up on the day, while stocks in the same sector (building materials) plummet over belated concerns about UK housebuilding (capitulation stage?).
Now at 27.5p, Ennstone are trading at half the price of a year ago. Would you find that attractive?
It seems some of the directors at Ennstone do, in particular Eric Gadsden, a non executive deputy chairman. Gadsden since November has bought 2.75m shares between 40p in November and 27p on Monday, taking his holding to 3.8m shares.
I don’t think this is a ‘bid tomorrow’ situation, as there aren’t enough directors buying shares. But I do think it wise in the long term to follow Gadsdens lead.
Signal strength- WEAK (only one director buying)
On March 23rd (BXB A$9.63) I expressed intrigue that a director of Brambles (BXB, 380p), Craig van der Laan, should be selling. See ‘Brambles directors sale- economic slowdown starting to hit?’.
On April 18th (BXB A$9.03) Brambles shares ‘slump’ by 10% after an admission that the supply agreement with Walmart was under review (see Bloomberg news here).
Today (June 2nd) (BXB A$8.10) Brambles declare that van der Laan (Group President of CHEP Asia Pacific) has been selling more shares. Over 26th and 30th May he sold 255,000 shares (in his wifes name) to reduce his holding even further, to 368,000 shares.
June 24th (BXB A$ ??) – Brambles have a scheduled ‘Trading update’. We should expect to be updated on the ‘Walmart contract’. I wonder if van der Laan has any insight into what Brambles will tell us ?
Despite warning that 2008 will be a difficult year (see Scotsman article of May 9th here), BPI or British Polyethylene (BPI, 242p) Chairman Cameron McLatchie continues to buy.
His major issues are weak sterling and rising oil prices (see BPI website for full statement). Maybe he believes BPI can cover some of this increased cost through ongoing cost cutting.
I give him credit for having sold within a whisker of the high of BPI, selling 300,000 shares at 637p in March and April 2006. The shares reached a high of 715p. And recently reached a low of 227p.
McLatchie has bought over March and May this year so far a total of 150,000 shares at between 235p and 238p, taking his holding back up to 462,000 shares.
This will no doubt be a long term investment for him, and for me if I choose to follow him. And possibly pretty volatile too as I haven’t a clue where oil prices are going, do you?
‘Corporate insiders on balance are betting on a rising market. The recent pace of insider selling is right in line with the long-term average. Insiders are not signaling any major market break in the next 9 to 12 months.’
So reports Mark Hulbert in Marketwatch May 21st.
He is looking at the Vickers Weekly Insider Report, published by Argus Research.
Click here to see the article.
Find us on twitter.com/directorsdeals
followthedirectors... a study of directors share dealings 