Insider: Big sellers as shares hit new highs

Unstoppable Jardine Lloyd Thompson

"Unexciting", valuation "up to speed", "not without challenges" are just some of the comments used to describe Jardine Lloyd Thompson's first-quarter results last month, which tipped the shares as much as 2.5% lower on the day. However, they risen sharply since, and to a level that's triggered a mighty sell order from the board.

Up almost 9% from that intraday low of 1,078p late April Jardine shares just hit an all-time best at 1,172p. That's well in excess of objectives set by many City analysts, which are nearer £11 than £12.

It also puts the shares on a forward price/earnings (PE) ratio of 20 times, dropping to 17 based on 2018 forecasts.

So a decision by the wife of Mike Reynolds – he runs Jardine's global reinsurance business - to sell 26,092 shares at nearly 1,167p a pop is in line with the analysts' view.

"We like JLT," said Panmure Gordon analyst Barrie Cornes a month ago, "and our 'hold' recommendation simply reflects the current valuation being, in our view, up to speed, but the dividend yield at 3.1% ensures that patient investors are suitable compensated."

Jardine also warned in April that, while it had made a good start to the year, "challenging trading conditions of 2016 in many markets around the world have continued in 2017".

"The group still must deliver, and its share price will suffer if it disappoints again," warns Joanna Parsons, an analyst at broker Stockdale.

Reynolds is wise, then, to bank that £304,000.

But hold on. Jardine also claims it will generate sustained year-on-year financial progress, which Joanna Parsons, an analyst at broker Stockdale, thinks will help support the view that JLT is "back on the front foot after a period of mixed messaging/delivery".

And Parsons believes it's possible "the worst is now behind us", although it remains to been seen what happens with the Financial Conduct Authorities' (FCA) probe into the aviation market will end in a big fine for JLT and peers – up to 10% of annual revenues of the affected units.

Paragon Group of Companies highest in a decade

After doubling in value since last summer, Paragon Group of Companies shares haven't been this expensive since the early days of the financial crisis mid-2007. And that decade-high has proved too tempting for one non-executive director employed to bring "an investor perspective to the board".

Hugo Tudor, a former UK equities fund manager at Schroders and BlackRock, has been at Paragon since 2014. He already owned 385,000 shares in the buy-to-let lender when he joined, plus £1 million of 6% sterling denominated notes due 2020.

He offloaded £250,000 of the notes in February 2016, and bought 75,000 ordinary shares at the same time at 305.5p, taking his stake to 460,000.

This week, in the hours and days after decent half-year results, Tudor sold 150,000 of them at between 470p and 476p to bank over £700,000.

Like Jardine, Paragon has exceeded many price targets set by analysts, although the results were actually pretty good, with underlying pre-tax profit of over £70 million ahead of some forecasts, and the dividend up 9%.

"The group has moved a long way in a relatively short period and is transitioning towards a more broadly based UK specialist banking business," the firm said. "The bank is now delivering strong profits, the vast majority of the group's new funding requirements and represents the foundation for growth going forward."

But it was a sad day for some in the City.

"These numbers evidence that mortgages are getting very tightly priced," noted finnCap financial analyst Jeremy Grime. "We have seen Atom bank, Santander and Yorkshire Building Society competing aggressively for mortgage market share. 65% of Paragon's interest receivable is still on first mortgages.

"It has moved from being a specialist lender to a mainstream bank, which always makes me feel sad like losing an old friend who has gone off to a new world of competitive strife. It doesn't look cheap enough for that world."

PE is 11, price/book is at least 1.3 and it yields 3%.

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.