The FTSE 100 is flying high in these last days of summer, but that hasn’t stopped directors at BP (LSE: BP) (NYSE: BP.US), Reed Elsevier (LSE: REL) (NYSE: RUK.US) and Sirius Minerals (LSE: SXX) buying shares in their own companies.
At what price did these directors buy, and how much did they invest? Read on!
BP
BP’s shares dropped over 6% on Thursday last week after a US federal judge ruled that the company was “grossly negligent” in the 2010 Gulf of Mexico oil spill. The statutory maximum penalty for simple negligence is $1,100 per barrel, but the penalty rises to $4,300 for gross negligence. As such, BP could have to cough up some $18bn.
However, the company immediately issued a statement saying it “strongly disagrees” with the decision and would be appealing the ruling in the US Court of Appeals. And, almost as immediately, BP’s chief financial officer Brian Gilvary laid out over £233,000 to buy 50,000 shares at 466.64p a time.
Even at a currently marginally higher price of 472p BP’s forecast P/E remains in bargain territory, at less than 10, and the company pumps a dividend income of over 5%.
Reed Elsevier
Nick Luff, the newly appointed chief financial officer of Anglo-Dutch business publisher Reed Elsevier, has wasted no time in splashing out on shares in his new company. The former finance director of Centrica bought 17,187 Reed Elsevier London-listed shares at 996p a time and 12,106 of the group’s Amsterdam-listed shares at €17.61, for a combined investment of around £342,000.
The price is little changed at the time of writing — 992p to be exact — putting Reed Elsevier on a forward P/E of over 17, compared with the FTSE 100‘s long-term average of 14. The dividend yield, at 2.7%, is below the market average. Not an obvious bargain, but if you share the finance chief’s confidence you can buy at around the same price he paid.
Sirius Minerals
Sirius Minerals is an AIM-listed potash development company, whose flagship development asset is a new potash mine near Whitby, North Yorkshire. The currently loss-making company is expecting key planning news at the end of this month, and Chairman Russell Scrimshaw has added to his holding.
Scrimshaw, a former deputy CEO of Fortescue Metals, the world’s fourth largest iron ore producer, increased his beneficial interest in Sirius with his family trust purchasing 2,100,000 shares at 11.75p each — an investment of approaching £250,000. If you’re the kind of investor who likes the odd speculative punt, you’ll have to pay a bit more for Sirius’s shares today; specifically, 12.25p.