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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.

I’m going to start to look more closely at using recent director dealing activity as a signal ahead of news. (I’m unsure about the reliability of what is essentially a long term signal being used as a forecast for short term movements in share prices. We’ll see how it goes shall we.)

All stocks listed below have news out next week.

All these stocks have seen director dealing activity which I have commented on. Click on the stock ticker to take you to the comment(s).

My favourite pick for positive feedback from an analysts visit is MISYS.

ENO neutral bid situation. Interims 13/5

ARM warm already had +ve Q1 on 29/4. AGM 13/5

CPG warm already had +ve trading update 27/3. Interims 14/5

MSY POSITIVE CEO, CFO, COO increased positions by 14%/50%/60% in late March. Analyst visit 14/5

AMEC POSITIVE CEO increased position by 50% spending £500k in April. AGM 14/5

CKSN POSITIVE CFO and CEO increased positions by 90% and 45% mid March. Trading Statement 15/5

III warm CEO Rea bought £500k on March 4th. Prelims 15/5

GFRM neutral already had trading update 1/5. AGM 16/5

All news dates are taken from Google Finance. They have not been verified with the companies themselves.

I want to recap here posts that I wrote last month, with the absolute and relative performance of shares to today. To see the original posts I am referring to, look for the title to the left of here, or type the company name into the ‘Search’ box.

April 3rd Diageo DGE 1055p NEGATIVE CALL -1.6% absolute, -7% relative

Negative call based on the news that CEO Walsh had sold £1m of shares, and upon reviewing his historical sales, found him to have excellent market timing.

April 7th Cairn Energy 2915p NEGATIVE CALL +5.4% absolute, +1% relative

Negative call on news that Non Exec Chairman had sold half his holding in Cairn

April 25th AMEC AMEC 752p POSITIVE CALL +9% absolute, +7% relative

Positive call on news that CEO Brikho had increased his position by 50%. buying £483k of shares

April 25th EAGA EAGA 135p POSITIVE CALL -13% absolute, -19% relative

Positive call based on directors buying in a vacuum of information or market knowledge on Eaga.

April 25th Galiform GFRM 71p POSITIVE CALL +18% absolute, +12% relative

Positive call based on intriguing market timing, namely CFO buying shares for the first time since joining the board in 2005, in an environment of negative news from the housebuilders.

April 30th Connaught CNT Eaga EAGA -4.5% relative

Switch suggestion (long term ‘2-3 sets of results’) from CNT into EAGA based on director selling in former, and buying in latter, as well as significant valuation differences

I’m back from a weeks camping holiday with the family to find a whole load of share dealings by UK directors, but nothing hugely inspiring. Most of the ‘regulatory news reports’ issued by companies relate to directors exercising options granted as part of their pay, and selling sufficient shares to raise cash with which to pay the tax man.

In the case of AMEC (AMEC, 752p) I find that CFO Stuart Siddall exercised options on 200,000 shares, and sold them all (April 4th 2008). He has done this before, so this isn’t a change in behaviour. He owns now only 30,000 shares in AMEC, maybe more if you count share awards in the pipeline as options still to be exercised and realised. Maybe he is just a conservative investor.

Now lets look at Samir Brikho, appointed CEO in October 2006. He has about 1m shares in the pipeline, in the ‘Performance Share Plan 2006 and 2002’. Yet he has been buying more. On the 7th April he bought 16,000 shares at 718p, and on the 24th April 50,000 shares at 742p, taking him to 182,000 shares (excluding the unexercised options or shares mentioned above).

Is this significant? I’d say yes. Brikho has spent £483,000 and increased his position in AMEC by 50%.

The caveat on this call is that I don’t have a share transaction track record to look back at, and also that share ownership by the directors of AMEC is currently pretty limited in the number of directors (only 3). But I suspect that is about to change.

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