Interactive Investor

Insider: best director deals of 2020

30th December 2020 11:58

Graeme Evans from interactive investor


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Often a good indicator of a company’s health, these directors definitely got their deals right this year.

Several directors who bought shares in the retail industry's darkest hour have been rewarded later in 2020 after their investments generated big paper profits.

They include Next (LSE:NXT) chairman Michael Roney, whose £100,000 purchase, made as shops were shuttered in March, is now worth £75,000 more after a sharp rebound in the retailer's valuation.

Former Bunzl (LSE:BNZL) CEO Roney repeated the trick at construction supplier Grafton, where he is also chairman, after the purchase of £60,000 shares in April has since led to a £35,000 paper profit.

Other examples of well-timed retail purchases included the £250,000 of Pets at Home (LSE:PETS) stock bought by CEO Peter Pritchard in May. That investment has risen from 203p to more than 400p as the FTSE 250 index stock benefits from essential retail status.

The profits reward their faith at a time when the industry was in uncharted territory, with the purchases also sending a powerful message to shareholders, staff and the wider industry about the confidence of management in their respective companies.

Some of the directors operating in sectors most exposed to the pandemic have also achieved profits after vaccine breakthroughs boosted hopes of a trading recovery in 2021.

They include ex-Cineworld (LSE:CINE) chairman Tony Bloom, whose £232,000 purchase of shares at near the low point for the leisure chain's shares, is up by 57% despite theatres still being closed.

At Restaurant Group (LSE:RTN), finance director Kirk Davis bought £100,000 worth of shares at the start of April at a price of 36p, which compares with 64.8p for the Frankie & Benny's chain currently.

For directors who bought shares prior to the pandemic, Halfords (LSE:HFD) chairman Keith Williams is sitting on a £54,000 profit after the FTSE 250 stock jumped from his purchase price of 154p to 262p. The shares initially dipped as low as 43p but are now one of the retail sector's best performing stocks after demand for cycling surged during lockdown restrictions.

When director deals go wrong

Superdry's (LSE:SDRY) Peter Williams hasn't been so fortunate after January's purchase of £110,000 worth of shares at prices above 400p. He lost almost £40,000 in value when CEO Julian Dunkerton's turnaround plans were disrupted by store and wholesale channel closures.

Ocado's (LSE:OCDO) Stuart Rose may also be regretting the timing of his sale of £1.7 million worth of stock in late February. Shares soared from 1,124p to 2,239p as retailers accelerated their online grocery development plans in light of the pandemic.

Lord Rose is leaving Ocado next year, having overseen its transformation from UK-focused FTSE 250 online grocer to a FTSE 100 global technology company during eight years as chairman.

Great timing

A better-timed deal involved February's sale of £3.6 million shares by the chief operating officer of Barratt Developments (LSE:BDEV), Steven Boyes. The disposals took place at 842p, but a month later the shares were at 364.8p in the pandemic sell-off and have since only recovered to 676p.

The low point for stock markets came around March 20, which is when William Hill (LSE:WMH) chief executive Ulrik Bengtsson bought the company's stock with the bookmaker's shares near a multi-year low of 39p due to the cancellation of sporting fixtures.

That £35,000 purchase has since jumped in value to £242,100 after opportunities in US sports betting and online casino markets boosted half-year results before the company agreed to a £2.9 billion takeover by Caesars Entertainment (NASDAQ:CZR).

May's move by BT Group (LSE:BT.A) boss Philip Jansen to buy shares in the telecoms giant came with the mood among rank-and-file investors at its lowest ebb after the loss of the prized dividend.

The £2 million purchase of shares at a price of 109p is starting to look a little healthier at the end of 2020 after shares recovered to 139p, although Jansen is still sitting on big losses from the £3 million he spent on BT shares the previous June at a price of 202p.

Novacyt (LSE:NCYT) boss Graham Mullis has no such worries after buying £30,000 of shares in the Covid-19 testing firm at 310p in May, only to see them surge to near 1,200p at one point in October. They now trade at 842p, which is slightly above the 817p paid by Mullis in November for a further £500,000 shares when vaccine breakthroughs knocked sentiment towards the stock.

The shares started 2020 at just 14p, but the company’s value has soared to more than £600 million after Mullis acted quickly in January to develop PCR kits that are now used in the rapid testing of NHS patients in the UK and by health authorities around the world.

Among other high-flying AIM stocks, Greatland Gold (LSE:GGP) has generated big profits for shareholders this year after progress on its Havieron joint venture in Australia sent shares up 1,840%. Beneficiaries include chairman Alex Borrelli, whose £4,000 spent in early February is now worth £36,000 after shares rose from less than 4p to 35p by the end of 2020.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. 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.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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