Insider: directors pile into FTSE 100 stock at huge discount

Under-pressure Melrose Industries (LSE:MRO) shares have received strong boardroom support after five directors spent £365,000 at prices as much as 25% cheaper than before the Iran war.

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Their investments followed an AGM update on 29 April, when the GKN Aerospace owner reported positive momentum in the first quarter and reiterated full-year guidance for revenues of up to £3.95 billion and an operating profit of between £700 million and £750 million.

While the Middle East conflict does not directly impact Melrose, it said it has experienced higher freight costs. Investor sentiment has also been shaken by uncertainty over the potential impact on civil aerospace flying hours from reduced jet fuel availability and higher prices.

In 2025, civil aerospace accounted for 71% of group revenues. Defence contracts made up the rest, including on major programmes such as F-35, Apache and Eurofighter.

The post-war selling pressure followed a negative reaction to results on 27 February as the mid-point of 2026’s operating profit guidance came in below the City consensus of £750 million.

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The company, whose Engines and Airframes divisions provide technology for more than 100,000 flights a day, is aiming for £1.2 billion by 2029 as part of the medium-term targets it set out last year. This will require an improvement in operating margin to 24% from 2025’s 18%.

The robust AGM update showed that Airframes enjoyed double-digit growth in defence revenues although this was partially offset by slower growth in civil aerospace due to lower narrowbody volumes.

Group revenues lifted 11% overall as Melrose reported margin progression and highlighted attractive fundamentals based on established positions on all the world's leading aircraft.

The FTSE 100-listed shares rallied to 516p by the end of last week, although they had been as much as 685p in mid-February. They’ve also traded below 470p briefly during the Iran war.

Senior independent director Alison Goligher bought £95,200 of shares following the AGM at 476p while the dealings involving colleagues took place at between 481p and 488p.

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Broker Peel Hunt notes that Melrose has been trading on a valuation of 9.1 times forecast earnings, which compares with the peer group of ATI, Hexcel, MTU, RTX and Safran on 17 times.

The City firm’s unchanged target price of 830p implies a multiple of 14 times.

It said: “Deserved or not, the stock appears to require further evidence to support the investment case rather than being afforded the benefit of the doubt. In this context, we see the first quarter update as a step forward, which may help to underpin investor confidence.”

However, UBS has a Sell recommendation after recently forecasting slower margin expansion in the Airframes division. The bank is also modelling free cash flow below the company’s 2026 guidance range of £150 million to £200 million.

Getting in early

The incoming boss of Christmas crackers firm IG Design Group (LSE:IGR) has ensured he is aligned with shareholders from day one of his leadership by spending £860,000 on shares.

Gerald Kuehr is not due at the helm until 1 July but his dealings mean he’s already exceeded the company’s requirement for executives to hold shares at least equal to their salary.

His purchase of a 1.27% stake took place on Thursday at a price of 67p, which compares with 44p seen at the end of 2025 and the 150p price target of house broker Canaccord Genuity.

Kuehr joins IG Design after a period of upheaval for the AIM-listed group, which also designs and makes gift packaging, greeting cards, stationery and creative play products.

It recently sold its largest division of DG Americas after US import tariffs significantly increased the cost of doing business and added further uncertainty to an already fragile market.

This left it with DG International, which the company said is a cash-generative business with strong growth potential and a historically stable customer base.

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A trading update at the end of April highlighted good trading momentum as IG Design said results for the year just ended were set to be ahead of consensus and board expectations.

It also announced an earnings-enhancing bolt-on acquisition in South Africa, with Glenart’s particular strength in crackers seen as complementary to existing operations.

Kuehr, who has been working with the group in an advisory capacity since January, brings 30 years of leadership experience in blue-chip consumer businesses including Unilever. Most recently, he served as chief executive of Partner in Pet Food.

IG Design’s products are sold to major retailers and supermarkets such as Tesco, Costco and Aldi, as well as online platforms and independent stores.

Its heritage brand Tom Smith has held a Royal Warrant for the supply of Christmas crackers and Christmas wrapping paper to the Royal Family since 1906.

Canaccord Genuity said recently that a price multiple of 6.1 times earnings was attractive “given the simpler, more profitable, cash generative business model moving forward.”