Interactive Investor

Insider: heavy trading at mid-cap and two popular FTSE 100 shares

27th March 2023 09:14

by Lee Wild from interactive investor

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Boardroom activity has triggered share buying at this well-known firm, while a pair of blue-chips have seen some interesting director trades go through in the past week.

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Vistry Group (LSE:VTY), the former Bovis Homes, has been in and out of the news for years, whether its concerns about the UK housebuilding industry, high-profile acquisitions, or corporate results. Latest interest concerns the appointment of a hedge fund boss to the board and what that might mean for ordinary shareholders.   

Jeff Ubben, founder of San Francisco-based Inclusive Capital Partners, joined the Vistry board as a non-executive director last week. On the same day, his fund splashed out £6 million on 800,000 Vistry shares, half at 754p and half at 746p.  

Ubben, who already sits on the board at ExxonMobil and wood pellets giant Enviva Inc, is no stranger to Vistry. Inclusive Capital is the £2.5 billion UK housebuilder’s second-largest shareholder, owning about 20.6 million ordinary shares, or 5.9% of the company.

That’s part of a 9.2% stake acquired in Countryside Partnerships last year which it tried and failed to buy for as much as £1.5 billion. Countryside eventually accepted an offer from Vistry worth £1.25 billion in cash and shares, which closed mid November.   

Vistry’s non-executive chairman Ralph Findlay said: "[Jeff’s] deep expertise and insights, particularly in impact and sustainability, will be of significant value as we continue to integrate our recent acquisition of Countryside Partnerships at pace."

Ubben said: "The combination of a distinct model addressing the acute shortage of affordable homes in the UK alongside leading private housebuilding brands gives Vistry the scale, operating synergies, and resources to deliver societal benefits and great long term returns to shareholders.  

Latest developments are part of a wider shake-up that involves the departure of two non-execs - Katherine Innes Ker and Nigel Keen. A hunt for replacements is underway.

But Ubben is not at Vistry to cause trouble. As part of his appointment, the American agreed not to propose resolutions at general meetings, circulate statements to shareholders or try and remove directors from the board. He will also use Inclusive's shares to vote in line with the majority of the board.

The boardroom activity came a day after Vistry announced annual results covering performance in 2022. The numbers were well received, with investors even brushing off a 20% cut in the final dividend. A full-year dividend of 55p is covered two times by group adjusted net earnings and equates to an historic yield of 7.6% at today’s share price. The allocation policy is under review.

Trading activity at these popular FTSE 100 shares

JD Sports Fashion (LSE:JD.) has strengthened its board recently, and the new non-executive director has wasted no time in gaining exposure to his new company.

Ian Dyson’s wife Janette just spent over £68,000 on 40,000 JD shares at 171.07p each. That’s a 20% discount to the one-year high at 213p achieved in February, but still 93% more than the highly-rated shares were trading at last October.

The purchase came less than two weeks after Dyson was appointed to his role at the tracksuits-to-trainers retail chain. He’s currently chair at electricals retailer Currys, but had held the same position at fashion giant ASOS and was once Finance and Operations director at M&S.

"He brings a wealth of relevant experience and insight to our deliberations,” said JD chairman Andrew Higginson. “The appointment of Ian is further progress towards strengthening the Board's broader PLC experience base.”

The global banking sector is in the eye of the stock market storm right now, and the UK FTSE 350 bank sector is down almost 16% since the current crisis began.

NatWest Group (LSE:NWG) is not immune, but it’s been more resilient than domestic peers. NatWest stock is down 11.5% since the close of business on 8 March compared with a 20.7% slump at Barclays (LSE:BARC) and 15.3% drop at HSBC Holdings (LSE:HSBA). Lloyds Banking Group (LSE:LLOY) is down 11.4%. It’s also outperformed rival banks over five days, one month, six months, a year and five years.

However, a stunning recovery from last October’s lows to near a five-year high at 313p began to unwind following annual results published mid-February. Rising interest rates fed through to massive profits for the high street bank, but NatWest kept forecasts for return on tangible equity of 14-16% both in 2023 and for the medium-term. It also suggested margins may soon peak, while guidance on costs exceeded analyst expectations.

Non-executive director Roisin Donnelly bought 7,318 at 271.9p, costing her almost £20,000, but that was more than offset by a big sale from Jen Tippen, NatWest’s Chief People & Transformation Officer.

Tippen, who NatWest poached from Lloyds Bank in spring 2020, netted over £198,000 after offloading 73,000 shares at 271.67p. That’s a discount to the February high, but still much better than the October low of 211p and the 108p level where NatWest traded at around the time Tippen joined the company.

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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