Directors at Thomas Cook (LSE: TCG), Ocado (LSE: OCDO) and Serco (LSE: SRP) evidently have no time for the old stock market adage “sell in May and go away”, because they’ve all been buying — and buying big.
Serco
Serco, the outsourcing group, suffered serious reputational damage last year, particularly from the high-profile scandal surrounding the electronic tagging of offenders. The shares and profits were badly hit, and the company was demoted from the FTSE 100 in September.
This year has seen a further profit warning and a fundraising to strengthen the group’s balance sheet, coinciding with the arrival of a new chief executive, Rupert Soames, on 1 May.
Soames immediately opened his wallet to buy 242,000 shares at 354.3p a time for a total investment of over £850,000. He was joined by chairman Alastair Lyons, who bought £100,000 worth of shares at 345p. Non-executive director Michael Clasper came a little late to the party, having to pay 373.9p a pop when making a £100,000 investment last week.
Serco, which has just won a contract to manage the new revamped London-Scotland sleeper train service, where partners include Michelin-starred chef Albert Roux, currently trades at 370p.
Ocado
Online supermarket Ocado is on track to make an annual profit for the first time, following its tie-up with Wm. Morrison Supermarkets.
The shares are currently changing hands for 365p; or a whopping 135 times this year’s forecast 2.7p earnings per share! Still, the future worth of Ocado is hard to estimate. Director buys during May were below the current share price, but these insiders were, nevertheless, prepared to pay well over 100 times the current-year forecast earnings.
Finance director Duncan Tatton-Brown splashed out £146,000, buying at 305p a share. Non-executive director Ruth Anderson got a slightly better deal — 303.5p a share — when she pulled £30,000 out of her purse to buy 10,000 shares.
Thomas Cook
Travel group Thomas Cook survived the recession by the skin of its teeth. Priced to go bust during 2012, the company’s subsequent recovery under new chief executive Harriet Green has seen the shares ’10-bag’ from the dark days.
However, the shares dipped 13% when the company announced its half-year results last month. Management revealed average holiday prices in Britain this summer were 3% lower than last year, while some analysts also thought the next phase of the group’s cost-saving plan didn’t go far enough.
Harriet Green was quick to show what she thought of the fall in the shares, picking up £50,000 worth at 154.2p a time. She was joined by non-executive director Martine Verluyten, who made a £38,000 purchase at 153.3p. Finance chief Michael Healy followed with a £30,000 buy at 150.5p, and non-exec Carl Symon chipped in with a £19,000 buy at 149.2p.
You’ll have to pay a little more than the directors if you want to buy into Thomas Cook today, as the shares are currently trading at 160p.