Interactive Investor

Insider: Rolls-Royce and Glencore among four FTSE 100 deals

Some popular blue-chip shares have done well in recent weeks, but others have some catching up to do. City writer Graeme Evans spots director deals at these high-flyers and laggards.   

3rd June 2024 08:21

by Graeme Evans from interactive investor

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A flurry of FTSE 100 boardroom purchases last week saw £170,000 of backing for miner Glencore (LSE:GLEN) alongside investments at Rolls-Royce Holdings (LSE:RR.), Compass Group (LSE:CPG) and Land Securities Group (LSE:LAND).

The dealings all involved the support of non-executive directors, including financial services veteran Martin Gilbert and the Citigroup investment banker David Wormsley at Glencore.

Their disclosure of purchases worth £72,850 and £96,200 respectively took place in the week that the copper, nickel and cobalt miner held its AGM in the Swiss town of Zug.

All resolutions were approved, including a new policy proposed by Gilbert’s remuneration committee that simplifies rewards for chief executive Gary Nagle to only salary and long-term incentives which must be held throughout and beyond his Glencore career.

Last week’s investments were dealt at prices between 481p and 487p as the pair backed Glencore to continue its recovery from February’s two-year low near 365p.

Sentiment suffered earlier this year as the transformational deal to buy the steelmaking coal business of Canada’s Teck Resources made top-up returns to shareholders less likely.

The shares closed last week at 480.75p, which compared with Deutsche Bank’s price target of 540p after the company recently delivered a strong first-quarter production update alongside robust marketing division guidance.

The Rolls-Royce investment worth £20,000 involved Angela Strank, whose regular purchases during 2023 included one in February when shares were just 126p.

Her latest dealings took place on Tuesday at a price of 448p, a week after an AGM trading update highlighted chief executive Tufan Erginbilgic’s increased confidence in 2024 guidance.

He told shareholders: “We have had a strong start to the year, despite continued industry-wide supply chain challenges.” In the City, UBS welcomed the positive trading update and said it saw no reason to change its 550p target price.

The £60,000 Compass purchase took place on Tuesday after a post-results pause in the upward momentum for shares in the industry, education and events caterer.

Arlene Isaacs-Lowe, who joined the board in November 2021, bought her shares at 2,176p. That compared with 2,321p prior to the interim figures in mid-May, when Compass reported forecast-beating organic revenues growth of 11.2% and a margin above hopes at 7.1%.

UBS, which has a price target of 2,475p, welcomed the results and increased guidance but also noted that Compass shares screened among the most crowded in its leisure coverage.

The backing for Land Securities came from senior independent director Moni Mannings and non-executive James Bowling. Both spent £30,000 at prices of 646p and 641p respectively.

Their purchases followed a mixed City reaction to May’s full-year results, despite the more upbeat tone of chief executive Mark Allan after two years of rising interest rates.

He said the recent stabilisation in rates and evidence of continued rental growth had started to attract increased investor interest in the best assets.

The company’s £10 billion retail and London-focused portfolio spans 22.8 million sq ft, the bulk of which has “significant scarcity value” with potential for like-for-like rents to continue to grow.

Bank of America said the recent results were slightly short of its expectations but described the company as among the least expensive property firms in Europe. It has a price target of 830p, which compares with Friday’s close of 652.5p.

Heavy selling at recovering mid-cap 

Elementis (LSE:ELM) chief executive Paul Waterman has raised £520,000 after selling shares on the back of a strong recent run for the FTSE 250-listed specialty chemicals firm.

Waterman has been in charge since 2016 but is under pressure from activist Gatemore Capital Management after it wrote to chair John O’Higgins calling for his replacement.

The 0.6% shareholder said the company, which supplies performance-based additives for use in cosmetics and skin and sun care products, had lost its direction and that shares were 30% lower than when Waterman took the helm.

In its response ahead of April’s AGM, Elementis said substantial actions were being taken as part of progress towards 2026 targets that include an operating margin of at least 19%. Waterman and other directors were re-elected at the AGM but with more than 12% of votes cast against.

Wednesday's disposal of shares took place at 149.6p and came after the annual report revealed he had a stake above the company’s requirement to hold at least 200% of salary.

The shares have risen 17% in 2024 and by 40% in the past year, closing on Friday at 150.2p. Deutsche Bank and Jefferies both have target prices of 170p after a recent first-quarter update revealed a material improvement in operating margin compared to a year earlier.

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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