Insider: has this senior FTSE 100 director spotted a bargain?

A Tesco Express store in London. Photo: John Keeble/Getty Images.

Cheaper Tesco (LSE:TSCO) shares have served up an opportunity for one of its senior directors after chair Gerry Murphy swooped for a £45,000 stake at a 10% discount to July’s price.

Murphy’s investment at 448.45p was back at a level last seen in mid-June, when the shares of Tesco and rival Sainsbury (J) (LSE:SBRY)’s were in the midst of strong runs towards multi-year highs.

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Sentiment towards the sector softened during the first part of August, with Tesco shares ending last week at about 455p compared with the 501.8p set on 29 July.

The shares fell as far as 440p on Tuesday after industry till-roll figures published by Worldpanel by Numerator showed that sales rose 1.8% year-on-year in the 12 weeks to 9 August.

A market share of 27.8% was lower for a third report in a row, still well clear of Sainsbury’s at 15.2% and having reached the highest level since 2015 in the previous financial year..

Tesco was also the recent subject of a downgrade by Shore Capital, which removed its three-year-old Buy recommendation and lowered its target price from 525p to 480p.

On a forecast multiple of 14.9 times earnings and with the dividend yielding 3.4% it said it regarded the stock as fairly valued.

Shore highlighted a trickier UK grocery retail scene as it said summer 2026 volumes were quite shallow, cost recovery not as easy and the competitive intensity a little higher.

It added: “The successive progress of Tesco, with very little new footage in tow, is a great achievement but that comparative mountain has, perhaps, become a potentially greater headwind for the firm.”

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Shore pointed out that Tesco has done “all that we could have asked” of the business in recent years.

It said: “An outstanding management team has executed retail delivery with excellent consistency and strong capital discipline has driven sustained cash generation, making for attractive total shareholder returns.”

The company’s annual results in April showed group sales rose 4.3% to £66.6 billion and adjusted operating profit lifted 0.6% to £3.15 billion. A 9.7p a share dividend was paid on 26 June, increasing the total for the year by 5.8% to 14.5p a share.

Non-executive chair Murphy said in the annual report: “Our investment in strategic growth, our outstanding leadership team and our continued focus on innovation give us the right fundamentals to do a great job for all the stakeholders we serve.”

AB Dynamics chief: acquisition will be earnings-enhancing in first year

The new boss of vehicle testing and simulation firm AB Dynamics (LSE:ABDP) has followed her first acquisition by staking £32,000 on the AIM-listed shares at a decade-low price.

Thursday’s dealings by Sarah Matthews-DeMers took place at 804p after the company earlier unveiled a deal to buy Michigan-based eMpulse Test Systems for up to $15 million.

Matthews-DeMers, who in December replaced James Routh as chief executive after six years as finance boss, said the new addition had a first-class reputation among its North American customer base and would be earnings-enhancing in its first year of ownership.

She expects the acquisition to provide an “excellent platform for growth” as AB Dynamics looks to rebuild after a profit warning at the end of July left shares as low as 751p. They had been 2,250p in May 2024 and 1,865p prior to the announcement of US tariffs.

July’s warning was blamed on reduced customer confidence and logistics headwinds caused by the Middle East war, as well as the impact of restructuring programmes by European manufacturers on order conversion in testing products and simulation.

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Testing products is the largest of its three divisions, with test tracks used to evaluate the performance of active safety systems, autonomous technologies and vehicle durability.

The group also provides physical simulators as well as advanced, physics-based simulation software for use by car manufacturers and motorsport teams.

The company has 14 facilities in six countries across Europe, North America and Asia, with more than 150 automotive clients. Just under half its revenues come from Asia Pacific.

Demand is underpinned by the increasing volume and complexity of vehicle safety tests, as well as the range of vehicle types including electric, hybrid, hydrogen and autonomous.

Panmure Liberum cut its price target from 1,570p to 1,150p in the wake of July’s warning, having made a 25% reduction in its earnings forecasts for the year to 31 August.

It added “We maintain our view that the fundamentals of the business (margins, return on capital, cash generation and balance sheet) are solid. However, it is a long journey back from here for the shares to re-rate.”

House broker Peel Hunt, which has a price target of 1,800p, said last week’s acquisition was highly complementary with compelling financials and opportunities for cross-selling.

It added: “We view the deal as consistent with the execution of a growth strategy that includes M&A. The current share price does not appear to reflect a return to materially higher organic growth.”

Last week’s boardroom dealings totalled £55,000 as experienced finance director Andrew Lewis, who is at the Wiltshire-based firm on an interim basis, and incoming finance chief Ed Haycock also bought shares at prices of just above 800p.

Graeme Evans owns AB Dynamics shares