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Between January and May last year, the CEO of easyjet (EZJ 301p), Andrew Harrison, doubled his position in the group by investing almost GBP 1.2 million ( ‘Harrison accelerates buying of Easyjet‘- followthedirectors, May 29th 2008).

Now Harrison has almost halved his position by selling 400,000 shares at 326p (January 28th, London Stock Exchange), leaving him with 438,000 shares.

Harrison bought easyjet shares when we were all panicking about highly inflationary oil prices. Oil peaked within two months of Harrisons share purchase, and easyjet shares outperformed the FTSE 250 by more than 60% from May 29th to now.

Is this directors share sale an important signal?

Yes, certainly for easyjet shareholders who have substantially outperformed the market, and in absolute terms are flat on the May 29th level, quite a remarkable achievement in these turbulent times.

And maybe even for Crude oil watchers.

Either costs are going to start rising at easyjet, or yields are at risk, despite what the company says in their statements ‘easyjet sees better H1‘ (Reuters January 22nd).

View on easyjet: Negative

Strength of Signal: Strong (track record, size and % of share sale)

Andrew Harrison, CEO of Easyjet (EZJ 292p) is accelerating his purchases.

In January he invested just under £250k.

In March he invested just under £250k

On May 27th he invested £682k by buying 187,000 shares at 265p.

Since January Harrison has more than doubled his position in Easyjet to 682,000 shares.

Not bad. But I’d love to see other directors stepping up.

Chandler, Doganis, Browett and Michels have only bought a measly 30,000 shares between them so far this year. Maybe there is a difference of opinion at Easyjet about future prospects.

Due to the relative inactivity of other directors, director dealing activity in Easyjet is classified as a weak signal.

Isn’t two months a long time in these markets!!

I was trying to find this post about the Easyjet (EZJ, 359p) Chairman Colin Chandlers track record in buying shares, and thought I’d written it only last month.

Andrew Harrison

Now we see Andrew Harrison, the CEO, last week buying 72,000 shares at 345p, putting £250k to work. He has increased his position by more than 1/3rd so far this year, having put in another £250k in January at 424p per share.

The stock fell ( collapsed?) last week after easyjet disclosed that it would suffer from jet fuel price rises. No kidding !! What do you pay these equity analysts to do? Any conversation with the company would have revealed how far forward they were hedged, and jet fuel prices are quoted daily.

I stick to my view in January that these guys are worth following.

‘EasyJet slides as planes fly with empty seats’

Easyjet shares have recently taken a nosedive, prompting four directors to increase their holdings by a significant amount (Michels- Non exec, Browett- Non exec, Chandler- Chairman, and Harrison- CEO).

It is the Chairman, Sir Colin Chandler, who has the best track record. He has bought stock three times in the last five years. Within 10-12 months of his purchase, on each occasion, the share price has appreciated by between 70% to 110%.

Sir Colin Chandler

February 2003- paid 205p. easyjet shares traded at 370p 10 months later.

August 2004- paid 140p. easyjet shares traded at 300p 12 months later.

February 2006- paid 378p. easyjet shares traded at 650p 10 months later.

January 2008- paid 424p.

OK, so Chandler never banked his profits. But from the evidence above he clearly recognises a buying opportunity. An example I’m happy to follow.

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