In these days of summer sales and sails, directors at AstraZeneca (LSE: AZN) (NYSE: AZN.US), Royal Mail (LSE: RMG) and Saga (LSE: SAGA) have been buying shares in their own companies.
At what price did these directors nail their colours to the company mast, and how much did they invest? Read on!
AstraZeneca
AstraZeneca released a strong set of first-half results last Thursday, and raised its sales and profit forecasts for the full year. Heavy buying by directors followed on Friday:
| No. of shares bought | Price paid per share | Total investment | |
| Leif Johansson (chairman) | 6,000 | 4,350p | £261,000 |
| John Varley (senior non-executive director) | 3,500 | 4,370p | £152,950 |
| Shriti Vadera (non-exec director) | 3,500 | 4,328p | £151,480 |
| Geneviève Berger (non-exec director) | 300 | 4,324p | £12,972 |
These buys come on top of a whopping £2m purchase at 4,345p a share by chief executive Pascal Soriot at the end of June.
If you want to follow the directors, you’ll have to pay at the upper end of their buying range, as the shares are trading at 4,370p at the time of writing. You’ll be paying a fairly chunky 16.8 times forecast earnings, but with a prospective dividend income of 3.8%, which is comfortably above the FTSE 100 average of 3.3%.
Royal Mail
Sold off by the government last October at a cheap-as-chips 330p a share, Royal Mail was trading at over 500p within days and reached a high of 615p in January.
However, the shares have since come well off those giddy heights in the face of downbeat newsflow that includes stiffening competition in the parcels market and a French subsidiary under investigation for anti-competitive practices.
Last week, Royal Mail’s chairman Donald Brydon and non-executive director Paul Murray decided the time was ripe to pick up over £50,000 worth of shares a-piece: Brydon bought 12,500 at 420.6p and Murray bought 12,304 at 421.5p.
If you reckon the directors know the price of stamps, you can buy in at about the same level — 420p at the time of writing. You’ll be paying a below-market-average 12.4 times forecast earnings and can expect a first-class dividend income of 5.1%.
Saga
Over 50s insurance and holiday group Saga is another recent entrant to the stock market. Saga’s private-equity owners were hoping to get a premium price, but failed to convince City investors that the business was worth a much higher rating than other insurers.
The shares were offered at 185p — the bottom of the indicative range — when Saga was floated in May; and are now trading even lower.
Chairman Andrew Goodsell has splashed out just shy of £200,000 in recent weeks to buy 113,000 shares in two lots at an average price of 176.4p. Finance director Stuart Howard has also opened his wallet, pulling out over £95,000 to purchase 54,054 shares at 177.2p a pop.
You can pick Saga’s shares up a tad cheaper today — 174p at the time of writing — but the forecast earnings multiple of 16.6 times is above the market average, while the dividend yield of 2.2% is well below.
