Insider: Big bets on BT bounce
3rd February 2017 11:49
by Lee Wild from interactive investor
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Last week I wrote about three shares going cheap where chiefs at down-at-heel , and had snapped up stock following nasty sell-offs.
Now, the board at another struggling blue-chip has dug deep and bet that its shares are a bargain.
BT bosses put money and reputations on the line
A week after an investigation into its Italian business uncovered a half-a-billion pound fraud, and with public sector work drying up or being priced lower, shares have hardly moved.
At 305p, they're still down 20% since the profits warning and speculative buying is not in sufficient size to offset willing sellers. Support is, at least, holding up at these levels, though, and top brass think a floor has been established.
In total, six execs or their families bought around 185,000 BT shares this week worth almost £560,000 in total.
Non-executive directors Anthony Ball, Iain Conn, Isabel Hudson, Karen Richardson and Nick Roses' wife Kay did the heavy lifting at 302p, although Hudson paid an extra 4p a share for here parcel of 4,872 shares.
Chairman Michael Rake's wife Caroline also bought 15,000 at 302p.
Either this is some kind of kamikaze effort to shore up the share price, or, more likely, confidence that there are no other skeletons in the cupboard. Whichever it is, there's currently a 5% dividend yield as reward for holding the shares.
Braemar Shipping
No apologies for mentioning Braemar again. Last week, we reported chief executive James Kidwell and non-executive director Jurgen Breuer and his wife spent about £137,000 on shares at 241p and 249p.
The market clearly agrees that the initial sell-off was too harsh, and the share price is up 22% from its low - at 2009 levels - to 266p.
That means that, in less than a week, Mrs Breuer has made a £5,000 paper profit, and both men only a little less. Hold onto the shares, which they will, and here too there's a fat dividend as compensation.
Now, a week after that grim profits warning - less oil & gas work at the technical division hit profits - we're told that non-exec Alastair Farley snapped up 20,000 shares at 247.5p late last week, and on Monday chairman David Moorhouse coughed up over £124,000 for 49,351 Braemar shares at 252p. He's already up nearly seven grand.
Whitbread new boy is a buyer
Premier Inn and Costa coffee chain owner dived over 5% last week following third-quarter results.
Total sales rose 8.6% and the company is on track to hit full-year forecasts. But, while Costa grew like-for-like sales by a much better-than-expected 4.3% in the 13 weeks to 1 December, the hotels and restaurants division was below forecasts at 0.8%.
Still, just weeks after joining the board as a non-exec, David Atkins, already chief executive of blue-chip property giant , spent £56,187 on 1,425 Whitbread shares at £39.43.
Numis Securities analyst Tim Barrett, whose forecasts are ahead of consensus estimates following recent upgrades, thinks they're worth £42, implying a potential 6.5% profit for Mr Atkins.
It was also interesting to see last month that chief executive Adam Crozier is named as a non-executive director at Whitbread. Having also run the Football Association and in his time, the slick form ad man starts his new role on April Fools' Day.
Might he also follow the tradition of the new man, or woman, buying a stake in the business they represent? Probably.
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.