Insider: management buy these two stocks after prices drop  

A major setback for Johnson Matthey (LSE:JMAT) has brought a strong response from its top two directors after they spent a total of £200,000 on shares at prices last seen in November.

• Our Services: SIPP Account | Stocks & Shares ISA | See all Investment Accounts

Chief executive Liam Condon and chair Andrew Cosslett made their moves following the revision of terms on Johnson’s deal to sell its catalyst technologies arm to Honeywell.

Their purchases at between 1,922p and 1,937p compared with the four-year high of 2,388p seen in January after demand was boosted by much higher platinum group metal prices.

City firm Berenberg called the reduction in deal price from £1.8 billion to £1.325 billion “a forgivable slip-up” as it highlighted a Buy recommendation and lower target of 2,250p.

It said: “Johnson Matthey is among the European chemicals companies with the highest probability of benefiting from consensus earnings upgrades. It is also one of the cheapest ways for investors to benefit from the upswing in platinum group metals (PGMs).”

• Stockwatch: a market top or imminent buying opportunity?
• Shares for the future: a new candidate for the Decision Engine

The company is the world’s largest secondary refiner of PGMs by volume, as well as the global liquidity hub for PGMs and expert in converting PGMs into high value products.

It said in November’s interim results that higher average PGM prices generated a £10 million boost to underlying operating profit, which lifted 34% across the group to £142 million.

Prices have continued to trend upwards since then, with the platinum price up more than 50% to $2,386 per troy ounce between 20 November and Friday.

Panmure Liberum pointed out last week that a $100 per troy ounce change in the average annual platinum and palladium metal prices would each have an impact of about £1 million on underlying operating profit in PGM Services for 2025/26.

The bank maintained its Buy recommendation but with a cut in target price from 2,570p to 2,310p in order to reflect the revised terms of the catalyst technologies disposal.

Announcing the deal in May, Condon said it was a significant milestone in the company’s 208-year history that would allow Johnson Matthey to focus on vehicle emission control and its higher margin services in platinum group metals.

• ii Tech Focus: Nvidia, software stocks, Crowdstrike, Broadcom
• Eight FTSE 100 stocks to pay £6bn of dividends in March

Both divisions benefit from large and durable addressable markets, with attractive long-term prospects. The FTSE 250-listed company believes they will be able to drive a step change in cash generation and lead to higher returns to shareholders.

Those returns were due to be supplemented by disposal proceeds of £1.4 billion. That’s now set to be £1 billion, comprising £800 million through a special dividend with share consolidation, plus £200 million buyback.

The catalyst technologies arm, which serves the fuels and chemical value chains, generated an operating profit of £92 million in 2024/25 but has since been hit by challenging market conditions.

The deadline for the deal’s completion has been extended to 21 July as the parties continue to seek regulatory approval in China. The business is a leading player in catalysts for several chemicals important to China, including methanol and formaldehyde.

Betting big on recovery

WPP (LSE:WPP) share purchases by new chief executive Cindy Rose and chair Philip Jansen have tied £250,000 of their own money to the success of a three-year turnaround plan.

The investments took place on Thursday at prices between 255p and 269.1p, which compares with 2023’s 1,000p when the advertising and marketing group was in the FTSE 100 index.

Its annual results earlier in the day showed revenues down 8.1% on a reported basis to £13.5 billion and headline operating profit 22.6% lower at £1.3 billion. The dividend for 2025 slumped 62% to 15p, which includes plans to pay 7.5p on 3 July.

Rose, who took over in September, said underperformance has been driven by excessive organisational complexity, a lack of an integrated operating model and inconsistent strategic execution.

However, the former Microsoft UK boss said she saw “huge potential” as these were all issues within the company’s power to fix.

Her “bold plan” will streamline WPP into four operating units across four regions, unified by the company’s AI marketing platform WPP Open. The strategy involves £500 million of cost savings to fund investment in growth and rebuild margins.

The immediate priority is to stabilise net new business performance before targeting a return to organic growth during 2027 and an acceleration from 2028 onwards. The dividend is set to be maintained at 15p a share in 2026.

• Shares, funds and trusts: how to generate £10,000 of income
• Sign up to our free newsletter for investment ideas, latest news and award-winning analysis

UBS said management gave an upbeat and credible presentation of their strategic and structural overhaul and that the changes were a step in the right direction.

However, the bank reiterated its Sell recommendation due to execution risks, particularly given ongoing industry headwinds.

It added: “We think the market needs to see the company deliver on guidance, improve net new business and prove the effectiveness of these initiatives before becoming more positive on the stock.”

WPP trades on a multiple of 5.6 times UBS’s forecast 2026 earnings, which the bank views as expensive versus rival Publicis on 9.3 times. It notes that the Paris-based firm is forecast to grow earnings per share by 7% in the three years to 2029 compared with 2% for WPP.