Insider: FTSE 100 directors spot bargains after AI sell-off

The cheapest Sage Group (The) (LSE:SGE) shares in over two years featured among last week’s insider dealings as more directors seized on opportunities presented by stock market AI disruption fears.

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The dip buying also included a purchase of IntegraFin shares after the US launch of a new AI tax planning tool caused the jitters to spread from the software sector to wealth-related firms.

The moves followed earlier investments by the chair of financial data firm Experian (LSE:EXPN) and several directors at FTSE 250-listed software investor HgCapital Trust Ord (LSE:HGT) as they responded to the rout triggered by Anthropic’s launch of a new AI automation tool for legal work.

The current results season means directors of many of the other companies impacted by the AI fears are prevented from buying shares until after the release of their figures.

Sage Group directors can buy shares, which non-executive board member Derek Harding did early last week when he spent £86,350 at a cost of 863.6p a share.

Boardroom colleague John Bates later disclosed purchases totalling £283,350, which took place on Thursday at prices between 809p and 811p. Bates has been a non-executive director since 2019 and Harding since 2021.

Their investments were at levels last seen in summer 2023 and compared with last February’s record 1,335p and 1,109.5p at the start of this year.

Shares weakened as far as 793p on Friday morning as the industry-wide re-rating caused by worries over AI’s threat to pricing power and competitive standing continued.

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European software valuations have now de-rated by over 40% since last July, according to UBS.

Its coverage trades at an average multiple of 18 times 12-month forward earnings, which is in contrast to the 10-year average of 32 times. However, the bank thinks this comparison is now less relevant for investors due to the “seismic shifts” in the marketplace that AI may bring.

The bank said investor feedback suggested that looking out over a three-plus years timeframe made sense, where Sage is on a multiple of 13 times forecast calendar year 2028 earnings.

The market’s fears have contrasted with the tone of Sage’s most recent trading update at the end of January, which showed a 10% increase in first quarter revenue to £674 million.

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The company, which specialises in finance, HR and payroll software tools, generated about 45% of its revenues in North America after growth of 12% in the region in the quarter.

Cloud and subscription growth mean about 97% of Sage’s revenues are recurring, providing investors with greater top line visibility. This progress follows the 2017 transformative acquisition of California-based cloud accounting software firm Intacct.

Deutsche Bank noted: “The competitive environment remained relatively similar, according to Sage, with some emerging competition in verticals such as software from AI-native players but not much change as it relates to established competitors.”

The bank, which had a price target of 1,150p prior to the recent sell-off, said it was encouraged by the start to the year but said the lack of an upgrade pointed to a second half slowdown.

Mid-caps going cheap 

Meanwhile, the dealings at IntegraFin Holdings (LSE:IHP) took place on Thursday after the company behind the Transact financial adviser platform fell sharply in the FTSE 250 index.

The company, which provides financial planning tools alongside an extensive range of investments and tax efficient wrappers, disclosed an investment worth £13,500 involving chief financial officer Euan Marshall at a price of 339.1p.

The shares were 351p prior to Wednesday’s market-wide sell-off and 376p in October.

Raspberry Pi Holdings (LSE:RPI) chief executive Eben Upton has swept up more of his company’s shares after they traded below the price at which they launched in June 2024.

The founder’s latest moves saw a £20,000 purchase on Wednesday at 262p and £40,000 last Monday at between 262p and 266p. He also spent £20,000 at the end of January.

The dealings compare with 280p when the maker of high-performance, low-cost general-purpose computing platforms joined the market in an oversubscribed flotation.

​​​​​​​The shares peaked at 766p just over a year ago, driven by a pipeline of opportunities among industrial-focused original equipment manufacturers. The acceleration in the company’s market valuation to £1 billion also reflected AI positioning through its suite of add-on products.

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However, sentiment has since been impacted by a rapid rise in spot prices for the dynamic random-access memory (DRAM) used in single board computers and compute modules.

The pressure on shares has continued even though the Cambridge-based business last month reported a strong finish to its 2025 financial year.

And while a return to more normal DRAM pricing and availability remains uncertain, the company is still confident that first half unit shipments will grow year on year.

Analysts at Jefferies cut their price target from 610p to 420p following the update but said the longer-term outlook appeared robust. 

Upton raised £1.8 million last summer when the expiry of lock-up arrangements in the initial public offering allowed him to offload 14% of his shareholding at a price of 454.5p.