Executives at two household names have taken profits. We reveal who they are and discuss prospects.
FTSE 100 index directors selling shares in the first week of 2021 included Rob Perrins at Berkeley Group (LSE:BKG). The housebuilder’s CEO secured £11 million from a disposal made on Friday.
Next (LSE:NXT) finance director Amanda James also raised £300,000 on Tuesday by selling shares in the high street retailer, making her one of four Next directors to do so in recent months.
The respective sales were made after a robust period for the blue-chip stocks as they benefit from positive trading and improved market sentiment in the wake of vaccine rollouts.
In the case of James, her sale of Next shares came hours after better-than-expected Christmas trading figures were accompanied by a forecast for a sharp rebound in profits in the next financial year. The online platform is doing so well in terms of expansion that yesterday's Sunday Times suggested that Next is starting to look like a mini Amazon.
Shares rose 8% on the day of the update and finished the week at 7,684p, which is the best level for more than five years. They had been trading at 3,390p in early April.
Other directors have already sold shares in the company, with CEO Lord Wolfson raising £10 million at a price of 6,787p in November and sales and marketing chief Jane Shields and merchandise and operations boss Richard Papp also doing the same.
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Despite the company's best efforts in terms of its trading performance, the City's verdict on Next shares continues to be one of caution. Analysts at UBS last week upgraded their price target to 8,100p but reverted to a ‘neutral’ recommendation, based on their view that there's now less scope for a further re-rating or upward earnings revision over the next year.
However, they added: “Some shorter-term investors seem to view the current valuation as a selling opportunity. After analysing what's priced in, we disagree.”
Downsizing at this housebuilder
The City's view towards Berkeley has also been positive, with shares up 17% since early November despite bouts of volatility over that period. Friday's sale by the wife of CEO Perrins took place at 4,743p, compared with a level of just above 3,100p in late March.
Confidence has been boosted by December's robust interim results, when the London, Birmingham and South East-focused builder stuck by its commitment for a £280 million annual cash return to shareholders in the period up to 2025.
It has continued to invest during the pandemic, with four new sites covering 2,800 homes added to land holdings and 10% more people now working on construction sites. The company has a strong record of creating opportunity out of difficulties, as its buying of land in the aftermath of the financial crisis showed.
That said, Perrins reminded investors of the uncertainties created by Covid-19 and tapering of government support. He is used to turbulent market conditions, having been on Berkeley's main board since 2001 and in his current leadership role since September 2009.
Friday's sale was the biggest by the Perrins household since he offloaded almost £12 million of Berkeley shares in September 2019.
Newbie takes out insurance with Aviva
A strong start to the year for FTSE 100-listed Aviva (LSE:AV.) has produced a swift paper profit for new board member Mohit Joshi, who bought shares in the insurer at 328p on Tuesday.
They are now trading at 347p after a robust first week of 2021 for the London market, while analysts at Deutsche Bank also described Aviva as the most undervalued of all the major UK insurers. The bank lifted its target price on the high-yielding company to 425p.
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Joshi joined the Aviva board as a non-executive director at the start of December and brings significant experience of operational and IT transformation. He is the president of the Infosys financial services, insurance, healthcare and life science businesses.
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