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25 directors buy shares in UK Engineering Companies
October 28, 2008 in Directors buying, FTSE 250 company, STRONG signal | Tags: Bodycote plc, Directors buying, Engineering sector, IMI plc, John Wood Group plc, Laird plc, Senior plc, Weir Group plc | 5 comments
I’m not talking about the big cap FTSE 100 stocks here, but smaller FTSE 250 companies that are the global leaders in their field of specialty engineering.
Many of these companies have grown from a UK engineering base to have globally spread customers. They may also be companies with less near term economic exposure, protected by longer lead times, and also big beneficiaries of a weak Sterling.
It is unusual to see so many companies in one sector showing directors purchases, most of which have occurred in the last ten days. The directors clearly think trading conditions are better than those indicated by the share valuations in the stockmarket.
Weir Group (WEIR, 295p) : Three directors have invested GBP 350k in last two months.
Provider of engineering solutions (pumps, valves, pipelines, maintenance etc) to the mining, oil and gas, and power generation markets worldwide.
10x Half year 2008 operating cash flow. GBP 620m mkt cap.
Senior plc (SNR, 42.5p): : Six directors have invested GBP 70k in last two months.
Senior designs, manufactures and markets high technology components and systems for the principal original equipment producers in the worldwide civil aerospace, defence, diesel engine, exhaust system and energy markets.
6.8x Half year 2008 free cash flow. GBP 170m mkt cap.
IMI plc (IMI, 269p) : Three directors have invested around GBP 80k in last two months.
13.8x First half 2008 operating cash flow. GBP 400m mkt cap.
Read ‘Can Sulzer come back and bid for Bodycote? Ask the directors’ published at followthedirectors October 28th 2008.
Laird plc (LRD, 153p): Four directors have invested around GBP 70k in the last week.
Laird plc‘provide technology for an increasingly connected world’ in the form of Electronic Components and Antennae enabling wireless connectivity (see co website for the lowdown).
10x First half 2008 operating cash flow. GBP 280m mkt cap.
Read: ‘Confident Laird directors delve into their pockets’ October 28th 2008 followthedirectors.
Disclosure: I have positions in Bodycote and Laird
Information sources: Company websites and London Stock Exchange.
Confident Laird directors delve into pockets
October 28, 2008 in Directors buying, FTSE 250 company, STRONG signal | Tags: directors dealings, Laird plc | 1 comment
Laird plc (LRD, 150p) ‘provide technology for an increasingly connected world’ in the form of Electronic Components and Antennae enabling wireless connectivity (see co website for the lowdown).
They last declared results at the end of July for the June half year, showing an operating cash flow of GBP 28m for the half year (or GBP 12.9m after tax and financing). For a company with a market cap of GBP 270m that looks pretty good (co slide presentation here).
On October 21st Laird issued an interim management statement, the key points of which we saw as ‘we continue to match our direct labour to changes in demand’ and ‘Laird remains extremely strong with low financial gearing and double-digit interest cover’ (full statement here).
In March the executive directors Hill, Silver and Rapp all exercised options and sold roughly the required amount to pay tax, at 494p per share.
In the last week four directors , including Peter Hill (CEO) and Jonathan Silver (CFO) above have been buying shares as follows (source London Stock Exchange):
22nd October :
Christopher Hum, non exec, buys 1512 shares at 161.675p per share taking his holding to 3000 shares.
Jonathan Silver, CFO, buys 20,000 shares at 167p per share, taking his holding to 210,000 shares
23rd October:
Peter Hill buys 18,000 shares at 156.36p, taking his holding to 200,000 shares, and finally
24th October:
AJ Reading, non exec, buys 3000 shares at 147.25p per share, taking his holding to 15,000 shares.
What do we think?
1. Four directors buying shares, mix of non exec and exec, shows confidence in the current half year performance of the group.
2. The size of purchases is however in three cases only 10-20%. I’d love to see a greater commitment.
3. Buying in times of huge uncertainty in the market is worth more to us as a signal than buying in stable times.
View on Laird: Positive- four directors buying
Significance of purchase: High/Strong– four directors buying in times of turmoil, four months into the half year.
See also ’25 directors buy shares in UK engineering companies’ (October 28th followthedirectors.co.uk)