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It was announced yesterday that John Juric, a PDMR [senior manager] of Fiberweb (FWEB, 52p), had on September 8th invested GBP 52,000 by buying 100,000 shares at between 52p and 52.2p.

This led me to review recent director buying at Fiberweb. Directors of the group have trebled their positions in Fiberweb by buying over 1.2 million shares in the last four months, at prices between 43p and 45.6p.

Fiberweb was spun off from BBA Group in late 2006, initially trading at 167p before moving to a high of 226p in February 2007. It wasn’t until the share price had retreated to 56p in October 2007 that a majority of directors started to buy.

I have suggested in past comments that these ‘signals’ from directors buying remind me of Enodis and EMAP, where, following a collapse in takeover talks, directors aggressively bought shares in their own company.

Signal strength for director dealing activity in Fiberweb remains ‘STRONG’

For my previous comments on Fiberweb ‘Directors buying, cost cutting, possible takeover target’, and ‘Directors pile in after takeover talks collapse’ click link here.

To access a Reuters profile of Fiberweb see here.

Enodis commentary here.

EMAP commentary here.

Disclosure: I have a position in Fiberweb.

Fiberweb (FWEB, 43.5p) are up 26% today (August 7) on the back of interim results demonstrating substantial benefits from cost cutting (Reuters results comment here).

In spite of this move, the CEO David Dayan and CFO David Abrams today bought 115,000 shares each at 43.11p.

This takes Dayan to 1,085,000 shares, and Abrams to 224,000 shares. So a significant % increase for CFO Abrams.

When I look back at historic buying, I find

  • CEO Abrams has bought almost 1m shares since October 2007 at between 43p and 56p
  • ALL six directors of the company have been buying shares. This is very unusual to have all the board investing like this.

And in my post of May 20th (‘Directors pile in after takeover talks collapse’ link here) I note that Fiberweb were also the subject of takeover talks which collapsed on April 23rd which resulted in the shareprice halving from near 60p to 30p.

To me this appears to be a very strong story: directors buying, cost cutting, potential takeover target.

The recent director buying activity means that Fiberweb stays on a STRONG signal.

Disclosure: I have a position in Fiberweb.

Addendum August 8th announcement by Fiberweb:

Richard Stillwell, Non-Executive Director of Fiberweb plc, purchased [on August 7th] 40,000 ordinary shares at a price of 43.5 pence per share. As a result of this transaction Mr Stillwell now beneficially owns 127,500 shares in Fiberweb.’

This reminds me a little of EMI and Enodis, where takeover talks failed, directors piled in, then the takeover talks were resumed, this time successfully.

Fiberweb (FWEB, 51p) however is tiny, with just a £60m market cap.

Takeover talks collapsed on April 23rd (see Independent comment here).

Between the 8th and the 15th of May, the CFO Abrams, CEO Dayan, and Non exec Stillwell all increased their positions substantially:

Abrams (CFO) bought 108,000 shares at 45.6p, investing £50k. He now owns 108,000 shares.

Dyan (CEO) bought 760,000 shares at 45.6p, investing £347k. He now owns 960,000 shares.

and Stillwell, a non exec director of Fiberweb, bought 60,000 shares at 40.5p, investing £24k. he now owns 87,000 shares.

So £370k invested between them, increasing existing positions substantially, with the potential now that capital markets are recovering for the bidder to come back again.

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