The FTSE 100 is riding high, but that hasn’t stopped directors at Barclays (LSE: BARC) (NYSE: BCS.US), Royal Bank of Scotland (LSE: RBS) (NYSE: RBS.US) and boohoo.com (LSE: BOO) buying shares in their own companies.
At what price did these directors nail their colours to the company mast, and can you buy cheaper today?
boohoo.com
Online fashion retailer boohoo.com is one of a number of internet businesses to have joined the stock market in recent months (think Just Eat, AO World and Zoopla). Boohoo’s shares began trading on the AIM market in March.
Last week, Peter Williams, boohoo’s chairman, upped his stake in the company by 100,000 shares. He paid 50.68p a pop; so, an outlay of over £50,000.
Williams, bought at a whopping 40 times the fast-growing company’s current-year forecast earnings. You can buy today at 46p — or just under 37 times forecast earnings. That still looks expensive on the face of it, but the chairman evidently doesn’t think so.
Barclays
Barclays is out of favour with the market. But not with Crawford Gillies, a former chairman of the Confederation of British Industry, who joined the bank as a non-executive director in May.
Gillies quickly made a maiden purchase of 10,000 shares at 257.13p. And followed up this month with another 40,000 shares at 239.76p, taking his total investment to over £120,000 and his average buy price to a bit above 243p.
Barclays shares are currently changing hands at 234p. So, below the price Gillies paid, and well below this year’s high of 300p made in January. At 234p, you’re paying just 0.8 times tangible net asset value and 10 times current-year forecast earnings. There’s a prospective 3.4% dividend income to boot.
Royal Bank of Scotland
Robert Gillespie, a former director general of the UK’s takeovers and mergers supervisory body, joined RBS as a non-executive director at the back end of last year.
Six months on, Gillespie has just made his maiden purchase of RBS shares. He pulled £85,000 out of his wallet to acquire 25,000 shares at 340p a pop.
As in the case of Barclays, you can buy RBS’s shares today a bit cheaper than the director paid. RBS’s shares are currently trading at 333p. The valuation metrics — 0.9 times tangible net asset value, 14 times current-year forecast earnings and no forecast dividend — make RBS less attractive than Barclays on the face of it.