Directors have been splashing the cash at AstraZeneca (LSE: AZN) (NYSE: AZN.US), International Finance (LSE: IPF) and Griffin Mining (LSE: GFM). Should you follow their lead and buy shares in these three companies?
Since the release of AstraZenecas Q1 results on 24 April, weve seen a mammoth buy from the FTSE 100 firms finance director, Marc Dunoyer, and a stream of significant purchases by multiple non-executives. The details of the dealings are shown in the table below.
|Director||Date of purchase||No. of shares||Price per share||Total investment|
|Marc Dunoyer||7 May||10,000||4,397p||439,700|
|Ann Cairns||30 April||1,100||4,455p||49,005|
|Shriti Vadera||29 April||3,500||4,563p||159,705|
|Cori Bargmann||29 April||700||$69.21||$48,447|
|Graham Chipchase||28 April||1,100||4,606p||50,666|
|Jean-Philippe Courtois||28 April||2,500||4,536p||113,400|
|Bruce Burlington||27 April||600||$71.03||$42,618|
Finance director Dunoyer looks to have got a nice price at 4,397p, because the shares are trading at 4,550p, as I write. Nevertheless, 4,555p remains lower than the prices some of the directors were prepared to pay.
The price also remains below the 52-week high of 4,863p reached last year, ahead of AstraZenecas board rejecting an indicative offer for the company of 5,500p a share from US giant Pfizer.
AstraZeneca currently trades on 16.4x forward earnings about in line with the wider market and offers an above-average yield of 4.1%. The companys increasingly robust drugs pipeline could begin to drive profits strongly higher in a couple of years, and the current valuation looks reasonably attractive to me.
International Personal Finance
Provident Financial demerged its international home credit operations in 2007 as International Personal Finance. IPF, now a FTSE 250 company in its own right, operates mainly in Central and Eastern Europe, and is growing strongly.
Last week, new chairman Dan OConnor made a maiden purchase of 41,500 shares at 481.4p a pop for an outlay of just shy of 200,000.
IPFs shares are trading at 503p, as I write, but remain below their 52-week high of 631p, and are on an undemanding multiple of 13x expected earnings for the current year, falling to 11.5x next year. IPF has pursued a successful strategy of measured and well-researched expansion into new territories, and could complement a UK lender such as original parent Provident in a diversified portfolio.
Zinc and gold miner Griffin Mining has been operating successfully in China since 1997, and has been listed on the AIM market since then. Griffins 2014 performance was hitby a three-month suspension of processing activities to facilitate an upgrade. Nevertheless, the company remained profitable for a 10th consecutive year.
Earlier this month, non-executive director Adam Usdan, who joined Griffin in March last year, made his biggest purchase to date. Usdan splashed out 400,000, buying a million shares at 40p a time. He now has a 17% stake in Griffin, through a personal shareholding and via his hedge fund Trellus.
Of course, small miners in far-flung places are higher-risk investments. However, Griffins history in China, a profit-making track record and its growth prospects all suggest that it could be one of the better bets among this class of company. Forward earnings multiples (9x this years earnings, falling to 5x next years) and a discount to net asset value (last reported NAV/share was $0.83) give a margin of safety and good upside potential.
A small-cap winner can really boost your portfolio, especially if you can spot the opportunity before the market has really woken up to it. Mark Rogers, the Motley Fool’s Head of UK Investing, believes he’s discovered just such an opportunity — and for a limited time only you can access his exclusive research report for FREE and with no obligation.
In “1 Small-Cap Stock Flying ‘Under The Radar’“, Mark explains why this company has strong potential for near-term growth in the EU and Japan and long-term upside from potential entry into the US market. He not only explains the return he hopes to see from this stock, but also reveals “When I’d sell”.
To read Mark’s free report on this stunning small cap opportunity while it’s still available — simply click here now.
G A Chester has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.