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Only a day after being appointed a non exec of Cairn (CNE,  1806p), Dr James Buckee has invested GBP 35k by buying 2000 shares at 1762p.

‘Dr Buckee was previously President and Chief Executive Officer of Talisman Energy Inc. Dr Buckee holds a BSc Honours in Physics from the University of Western Australia and a PhD in Astrophysics from Oxford University’ (Company website).

In October 2008,  six directors of Cairn invested just shy of GBP 480k at 1816p. See ‘Cairn Energy – Directors buyback closes negative view with 45% return’.

Since then Cairn have outperformed the market (FTSE 100) by 9%.

In April 2008 two non exec directors of Cairn sold shares at 2915p, and in May six directors sold shares at 3366p. From April to October Cairn fell 45%, which was 20% more than the market. See ‘Cairn Energy- non execs reduce holdings substantially’.

Based on historical performance,  I believe that any dealing activity by Cairn directors is worth listening to.

View on Cairn: Positive

Strength of signal:  Medium, no change from our comment of October 9th 2008.

News ahead: Operational Update from Cairn tomorrow (!) January 20th.

For all our comments on Cairn click here.

I’m back from my hols. The last time I went sailing I returned to find my portfolio hit by close on 50% due to a severe inventory shock at Nokia handsets. This time it’s probably almost as bad, although I haven’t dared log in to check yet.

I’ll warn you the next time I’m on the water!

I notice that Cairn Energy (CNE, 1582p) directors have been buying shares (see Sharecast article ‘Cairn Energy Bosses buy in’ here). If you look at the purchases though, you’ll see that although between them they invested GBP 480k, the directors have increased their position sizes by less than 10%. This is not sufficient to warrant a STRONG signal with a positive angle, but would warrant a MEDIUM signal due to the high number of directors buying (seven in total).

Lets now go back to April 7th this year, when I wrote ‘Cairn Energy- non execs reduce holdings substantially’. Four directors had sold shares, including the CEO Gammell and the director of exploration Watts (read the full article by clicking on the link above). The big important message to the market was provided through share sales by non execs Murray and Hart who sold between 1/3rd and half their holdings

Back then the share price was 2915p. Cairn are now 1582p.

That is a fall in the value of Cairn Energy shares of 45%. Over the same period the FTSE 100 index is down by 25%.

So if you listened to the directors message (not mine- it’s the directors that sold shares, they provided information to the market through their actions) in April, and sold your Cairn shares, I’d be happy now to close that short/sale with a 45% return.

Thankyou Norman Murray and Todd Hart.

Signal: directors buying = positive

Signal strength: MEDIUM ( many directors buying but insufficient size to warrant a Strong signal)

For all Cairn comments on this site click here, or enter ‘Cairn’ in the search box to the left.

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

There’s a plethora of information about directors share dealings in Cairn Energy ( CNE, 2915p) last week.

If you filter out the sales by executive directors of shares released under the Long Term Incentive Plan, and eliminate shareholdings sold and bought back before CGT changes, you are left with four notable changes in holdings:

1. CEO Sir Bill Gammall has sold 50,000 shares taking his holding to 377,000 shares.

2. Exploration Director Dr Mike Watts sold 40,000 shares taking his holding to 160,000 shares.

In my mind both of the above sales are interesting but not hugely significant.

Of greater interest are the sales by Non Executive Directors as follows:

Norman Murray- Cairn Energy Chairman

3. Non executive Chairman Norman Murray halves his holding by selling 40,000 shares at £28.61, releasing £1.1m, and

4. Non executive Director Todd Hart reduces his holding by more than a third, selling 10,000 shares to leave him with 18,000.

I believe these sales to be significant, both in value terms, and as a proportion of the directors’ position (holding) in Cairn prior to the sales.


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June 2022