Directors at drinks giant Diageo (LSE: DGE) (NYSE: DEO.US), oil and gas firm BG Group (LSE: BG) (NASDAQOTH: BRGGY) and Reckitt Benckiser spin-out Indivior (LSE: INDV) have recently been splashing cash on shares in their own companies.
Diageo
Diageo, the owner of Johnnie Walker whisky, Smirnoff vodka, and a host of other world-renowned brands, is highly rated by the market on a forward P/E of 20. But that hasn’t stopped chief executive Ivan Menezes buying himself a big wodge of the company’s shares.
Menezes’s recent purchase (of the firm’s US-traded stock) equated to a sterling investment of around £660,000 at 1,910p a share, and followed on from a smaller investment of £30,000 at 1,970p a share by non-executive director Alan Stewart.
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Diageo’s shares are trading at 1,885p, as I write, so you can pick them up a little cheaper than the directors, if you want to follow their lead.
BG Group
BG Group, the FTSE 100‘s third-ranked oil and gas group behind Shell and BP, saw its shares fall from nearly 1,300p last summer to a low of 795p in December, alongside the collapse in the world oil price.
The shares have recovered somewhat since, and after the group’s recent full-year results, non-executive director Pamela Daley decided the time was ripe to more than double her stake in the company. Mrs Daley bought 17,800 shares, jointly with her husband, at a price of just over 921p a share, for a total outlay of £164,000.
With BG expected to see a big fall in earnings in 2015 — putting the company on a P/E of around 35 — you’ll certainly need to take a long-term view, if you want to invest today. You’ll also have to pay a higher price than Mrs Daley, because the shares are trading at 970p as I write.
Indivior
Indivior was the pharmaceuticals division of consumer goods group Reckitt Benckiser, until spun-out and listed as an independent company just before Christmas. The shares closed at 145p on Christmas Eve, but climbed as high as 178p early this month.
Chief executive Shaun Thaxter has been buying Indivior shares like they’re going out of fashion since the company announced its maiden results on 11 February. Multiple purchases averaging around 162p have taken his stake in the firm from 110,000 to 425,000 shares.
Chief financial officer Cary Claiborne has also made a substantial investment, in nearly 110,000 shares, while corporate affairs chief Debby Betz has picked up 23,800 shares. This pair was willing to pay up to 167p a pop.
Indivior’s earnings are expected to decline in the next couple of years, as its principal product faces competition and before new products kick in. At a current share price of 165p, the forward P/E for 2016 is a reasonable-looking 13.
