Insider: where FTSE 100 directors are still finding bargains

These blue-chip stocks have been dragged far from their recent peaks, allowing bosses to take advantage of cheap prices. City writer Graeme Evans names the buyers.

12th January 2026 08:38

by Graeme Evans from interactive investor

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Tesco (LSE:TSCO) chiefs Ken Murphy and Imran Nawaz have countered the City’s downbeat reaction to festive trading figures by spending a total of £100,000 on the grocer’s shares.

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Their £50,000 purchases were made on Friday at a price last seen in August, having fallen 7% the previous day when third-quarter sales growth came in below some analysts’ estimates.

The selling pressure highlighted the lofty expectations now facing the supermarket after an earlier re-rating of shares left them 20% higher in 2025 and up by 40% since April.

The strong run meant Thursday’s upgraded profit guidance to the upper end of £2.9 billion and £3.1 billion was only enough to keep the chain in line with existing City consensus.

Murphy, who has been chief executive since October 2020, told investors that competition was as intense as ever, but that Tesco was well placed for the year ahead. He added: “I am delighted with the strong Christmas we delivered for our customers.”

He reported the highest market share in over a decade at 28.7% as Tesco’s UK underlying sales growth for the third quarter to 22 November rose 3.9% and for the six-week Christmas trading period to 3 January by 3.2%.

However, these figures were short of the average of market forecasts at 4.1% and 3.9% respectively. There was also disappointment at wholesale division Booker, which recorded a 2.1% decline in Christmas sales.

Deutsche Bank trimmed its price target by 10p to 490p following the trading update but said the share price reaction looked to be overdone.

It said: “We continue to view Tesco as a high-quality multi-year compounder and view this pullback as a buying opportunity.”

The bank said the near-term UK like-for-like sales performance had been impacted by softer market volume trends and behind-market price inflation.

From a longer-term perspective, it said Tesco had outperformed the market on both a value and volume basis and that this left the group well positioned into 2026.

Shore Capital said Tesco’s strong balance sheet, organic growth, free cash flow-funded ordinary dividends and recurring buy-back made the shares worthy of keeping.

It added: “Whilst we cannot bang the drum as hard as we have been over recent years, due to the re-rating, we retain an ongoing Buy stance.”

Murphy and his chief financial officer bought their shares at a price of 418p. The stock ended the week at 415.4p.

The selling of quality compounder Compass Group (LSE:CPG) due to fears over how AI-driven job losses might impact the contract caterer has brought a strong response from its finance chief.

Petros Parras, who joined the group in 2020, spent £350,000 on shares on Friday at a price of 2,383.8p. They were a record 2,843p last February and 2,637p as recently as late October.

As well as the possibility of AI job displacement among Compass clients, the de-rating has been driven by dollar weakness, a weakening US labour market and a wider rotation away from European quality compounders.

That’s despite a continued strong operational performance after Compass grew its top line faster than smaller rivals Aramark and Sodexo in the $300 billion food contract catering market.

Organic revenue growth in November’s annual results came in ahead of the City consensus at 8.7% and was accompanied by an operating margin of 7.2%. The dividend rose 10.2%.

For 2026, it is guiding towards operating profit growth of about 10% on organic revenues 7% higher. Longer term, Compass said it remains confident in sustaining mid-to-high single-digit organic revenue growth, ongoing margin progression and profit growth ahead of sales growth.

UBS, which has a price target of 2,985p, said recently: “Sentiment wanes and waxes, but our conviction that market expectations underappreciate the near-term and long-term revenue growth and margin expansion potential remains.

“With no material changes to the market backdrop likely in the 2026 financial year in our view, we see more of the same as no bad thing.”

Counterparts at Berenberg agree the valuation presents an attractive opportunity, noting that shares trade at an 8% discount to history on a structurally higher growth outlook and algorithm.

It said: “Operationally, Compass behaved like the best-in-class compounder that it is in the 2025 financial year, delivering earnings upgrades, deploying capital into attractive M&A and returning cash to shareholders.”

Bank of America added recently that shares were at a particularly attractive entry point for long-term investors. It had a price target of 3,000p.

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.

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