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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.

This is an update on two strong calls.

‘Strong’ because of the extent (number of directors) and size (as % of previously held positions) of director buying.

Severfield Rowen (SFR, 331p) have announced that John Featherstone, a non exec director, has sold almost all his shares, realising £387,000.

This in itself is not a strong sell call, but may signal an opportunity to take profits. SFR are up 26% absolute, and up 25% relative to the FTSE 250 since the original buy signal on January 31st (see the post here).

Enodis (ENO, 224p) yesterday announced an approach from Manitowoc (MTW), possibly as high as 260p (see news here) . In November senior directors bought shares between 166p and 186p. See original post of December 2nd here. Since then Enodis are up 30% absolute, or up 37% relative to the FTSE250.

I want to wish you ‘good investing’ in a period of huge uncertainty. I suppose (is ‘hope’ a more appropriate word) the brave will be there to buy when everybody is panicking, which is why I’ve allowed myself to have a list of buys.

When I look at directors dealings I’m looking for a change of pattern or direction, an intensity of director interest indicated by volume and speed, and a sentiment change within a sector.

Stocks that satisfy one or more of these criteria are

  • Wolfson (WLF)
  • Aegis (AGS)
  • Findel (FDL)
  • Enodis (ENO)
  • Segro (SGRO)
  • Hammerson (HMSO)
  • Great Portland (GPOR)
  • Yell (YELL)
  • Michael Page (MPI)

Look in the archives or via the tag list for my reasoning on these stocks.

Real estate stocks are overweighted here, which I suppose shows a tendency to ‘value’, by me and company directors. If I look at the real estate sector overall though, I find that over the last month director buys outnumber sells by about 4:1 (source www.digitallook.com). Interestingly the bank directors seem to have gone a little quiet recently, after a flurry in early November (see RBS) !!

You’ll also notice a preponderence to midcap or ftse250 stocks in this list. This is not intended, but a result of the criteria. I don’t look at stocks smaller than the ftse 250.

Enodis (ENO, 172.5p) is a nice little mover, and not new to bid rumours. Its directors seem to consistently take advantage of any setbacks in the share price.

To see if a pattern has been established, let’s go back a couple of years, to January 2006:

Jan ’06- Mike Cronk (non exec) and David McCulloch (ceo) both buy 50k shares each, at prices between 133p and 136p.

June ’06- Enodis reaches 215p (on news of discussions with Manitowic ticker: MTW)

August ’06- Peter Brooks(non exec and chairman) and Mike Cronk buy 38k shares between them at 171-172p

Jan ’07- Mike Cronk buys another 50k at 208p

Feb ’07- Enodis trades up to high of 223p (despite co rejecting AGA bid approach in Nov 06)

Sept ’07- Peter Brook buys 30k shares at 175p

Oct ’07- Enodis trades up to 215p on more bid rumours (supposedly Manitowoc again)

Nov ’07- Joseph Ross (non exec), David McCulloch (ceo), Mike Cronk (non exec) all buy shares between 166p and 186p.

In my opinion these recent purchases are not significant in terms of the number of existing shares held, but they do show a continuation of a significant behavioural pattern, from which you and I should be able to benefit.

Maybe sufficiently to be able to buy a new kitchen!

Enodis Kitchen

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July 2020
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