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I read with interest the report (link to Forbes article here) on the interview with Steve Ingham, CEO of Michael Page (MPI, 385p ) in Finanz und Wirtschaft where he was reported as saying that ‘Yes, he would consider selling the company at 600p’.

This is supported by historical director sales back in April and May 2007, which took place at between 560p and 580p. Those sales, in my view, indicated that the directors believed Michael Page to be fairly, maybe fully valued at those levels and at that time. The subsequent purchases in November 2007 at 280p, as reported below, would therefore indicate that the directors thought Michael Page to be undervalued.

Now we know the offer price, we need to find the bid price from Adecco. I would hazard a guess that an agreed deal would be possible in the high 400p’s.

Last Thursday, November 21st, the three amigos at Michael Page International (MPI), CEO Ingham, CFO Puckett and MD Dumon, stepped in to buy back shares they had sold only 7 1/2 months earlier at twice the price.

Steve Ingham, CEO of MPI Stephen Puckett, CFO of MPI

They each bought 170,000 shares at 280p. Puckett and Ingham sold on April 10th around 147,000 shares at 560p each. Dumon sold 428,000 shares on April 10th and May 4th at between 560p and 580p.’ (posted on followthedirectors on November 25th 2007, full text here).

For all comments on Michael Page click on the ‘TAG: Michael Page’ at the top of this post.

Disclosure: I have a position in Michael Page shares.

I questioned earlier this year why we’d seen a lot of activity in the Recruitment Sector (Michael Page, SThree, Robert Walters). Either things weren’t as bad as the market forecasts for economic slowdown were indicating (unlikely given the high sensitivity of the sector to any change in economic growth), or we were to ‘expect future merger activity within the sector’.

Patience is a virtue. Those of you who have been patient are now rewarded after todays bid approach for Michael Page (MPI, 346p) from Adecco (news comment from Bloomberg here).

Michael Page are up 15% absolute and up 30% relative to the FTSE 250 since my note of November 25th.

For past commentary on the sector click here: Recruitment Sector

Robert Walters

Robert Walters (RWA, 167p) directors, having sold 4.7m shares from March to September last year, at prices between 330p and 368p, are now starting to buy back their positions.

Robert Walters, CEO, and Giles Daubeney, COO, have this week bought 740,000 shares at around the 150p mark. Allan Bannatyne, CFO, has started a position by investing about £65,000 at the same level. See Yahoo Finance for details.

In August last year Robert Walters was ‘the subject of takeover interest from leisure recruitment specialist Berkeley Scott’ (Telegraph 21/8).

In November last year we saw directors of Michael Page (MPI) and SThree (STHR) investing quite heavily, investing £1.1m between them (see Michael Page comments).

Maybe conditions in this sector, which has a high sensitivity to economic growth, aren’t as bad as the market thinks. Or maybe expect future merger activity within the sector.

Next news Tuesday March 4th- Michael Page earnings release. Expect a comment on current trading.

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.

Last Thursday, November 21st, the three amigos at Michael Page International (MPI), CEO Ingham, CFO Puckett and MD Dumon, stepped in to buy back shares they had sold only 7 1/2 months earlier at twice the price.

Steve Ingham, CEO of MPI Stephen Puckett, CFO of MPI

They each bought 170,000 shares at 280p. Puckett and Ingham sold on April 10th around 147,000 shares at 560p each. Dumon sold 428,000 shares on April 10th and May 4th at between 560p and 580p.

I suggested in my post on November 14th that, following the move by Nelson, CFO of SThree (STHR), who bought £100k worth of shares at 211p having sold in November 2006 at 372p, we were likely to see a positive share price move in the sector.

Look for more news from SThree next Thursday, when they give us a ‘pre close trading update’. This is likely to be positive for the Recruitment Sector overall.

Do you remember Randstads profit warning in July this year? You should. Share prices in Randstad (RAND), Michael Page (MPI), Hays (HAS) and SThree (STHR) have fallen since then by around 30-50%, from year highs to near year lows now.

Michael Nelson, CFO of SThreeInteresting then that yesterday the CFO of SThree, Nelson, dips his toe in the water and picks up £102k of stock, increasing his holding by a third. Even more interesting is that the company are due to announce a trading update on November 30th.

Nelson sold about 14000 shares at 372p in November last year. Looking back to April this year it is also curious to see three senior managers (CEO, CFO and MD) at Michael Page take out £700k to £800k each by selling down their positions, over and above the stock they sold as a result of options exercise, within 7% of the all time high for MPI.

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