We think it is time to take profits in Smiths News our Income Tip of the Year. All good things have to come to an end and, as the company’s share price approaches record highs, it has produced a stellar 92 per cent gain in a little under a year - in fact, over 100 per cent if you add in the 9p dividend.
And it appears we are not alone in thinking that cash in the bank is always the best type of gain. Managing director of the Bertrams books business, Graeme Underhill, sold 194,598 shares at 158p on 26 November - that block represents around half his interest in Smiths News. And value fund Silchester International Investors, one of the biggest single shareholders, has dumped shares worth a whopping £3.59m, almost 2 per cent of the entire share capital of Smiths, on to the market in the last two weeks.
We don’t think this is a cause for concern, Silchester is retaining a 15 per cent stake in Smiths, while the shares, despite this year’s performance, are still only rated on eight times forecast earnings, and remain at a discount to the sector. But it is more a case of prudent investing, whereby you sell half your stake and still enjoy that dividend. At 150p, we downgrade Smiths News' shares to a Hold.
John Ficenec
Don't follow the SDL leader
No one can accuse Mark Lancaster of letting the grass grow under his feet. In early November he switched roles from chairman to chief executive at SDL, a web content management company, and appears to have wasted no time in poring over the books. On 26 November he announced a trimming of full-year profit forecasts by between £3m and £4m. Aside from taking a more cautious approach to contract completion, Mr Lancaster flagged up poor sales and marketing execution as a contributory factor. “Despite the short-term shortfalls in the business,” added Mr Lancaster, “I feel more confident in SDL’s technology stack and solutions than I have ever been.”
Mr Lancaster’s reassurance was not enough to stop SDL’s share price slumping from 511p to below 440p, prompting the chief executive to put his money where his mouth is. On 27 November, Mr Lancaster splashed out £750,000 on SDL shares, quadrupling his stake in the company to 0.83 per cent. An impressive move, undoubtedly, but questions remain. Panmure Gordon says research and development levels look under par and competitors have not stood still. Product confusion and slow software progress are also problems Mr Lancaster must grapple with, says the broker. A hold position looks much more prudent than Mr Lancaster’s bullish move.
Ken Wieland
Buys
| Company name | Director | Date | No. of shares | Price (p) | Value (£) | Holding (shares) | Holding (%) |
|---|---|---|---|---|---|---|---|
| AstraZeneca | Geneviève Berger | 22 Nov 12 | 400 | 2856 | 11,424 | 900 | - |
| C&C | Joris Brams | 23 Nov 12 | 4,000 | E4.0965 | E16,386 | - | - |
| Camper & Nicholsons Marina | Martin Bradford | 23 Nov 12 | 250,000 | 10 | 25,000 | 250,000 | 0.33 |
| Camper & Nicholsons Marina | Martin Bradford | 26 Nov 12 | 200,000 | 10 | 20,000 | 450,000 | 0.6 |
| Corero Network Security | Jens Montanana | 22 Nov 12 | 50,000 | 31 | 15,500 | 15,868,687 | 27.06 |
| Cupid | Russ Shaw | 26 Nov 12 | 5,367 | 183.5 | 9,848 | 10,064 | 0.18 |
| Dexion Trading | Robin Bowie | 21 Nov 12 | 843,000 | 118.5 | 998,955 | 2,529,000 | 2.649 |
| Edinburgh Worldwide Inv Trust | D Reid | 22 Nov 12 | 40,000 | 282 | 112,800 | 514,715 | 1.05 |
| Energy Assets | Dr Christopher Masters (ch) | 21 Nov 12 | 20,000 | 190 | 38,000 | 30,000 | 0.11 |
| Energy Assets | Philip Bellamy-Lee (ceo) | 22 Nov 12 | 5,125 | 194 | 9,943 | 10,125 | 0.04 |
| Energy Assets | Russell Gibson | 26 Nov 12 | 5,108 | 194.5 | 9,935 | 10,108 | 0.04 |
| Fiberweb | Andrew Hosty | 26 Nov 12 | 15,000 | 63.87 | 9,581 | 15,000 | 0.009 |
| Getech | Raymond Wolfson | 22 Nov 12 | 10,000 | 40 | 4,000 | 50,000 | 0.17 |
| Global Energy Development | Stephen Voss | 20 Nov 12 | 5,000 | 96 | 4,800 | 185,568 | 0.51 |
| Global Energy Development | Stephen Voss | 26 Nov 12 | 25,000 | 100 | 25,000 | 210,568 | 0.58 |
| Grainger | Mark Greenwood | 22 Nov 12 | 20,000 | 114.36 | 22,872 | 103,606 | 0.02 |
| Henderson European Focus | R Dennis | 21 Nov 12 | 2,000 | 609.443 | 12,189 | - | - |
| Henderson European Focus | R Dennis | 22 Nov 12 | 3,000 | 614.694 | 18,441 | - | - |
| Howden Joinery | Matthew Ingle (ceo) | 26 Nov 12 | 14,000 | 164.8 | 23,072 | 3,299,280 | 0.514 |
| InterQuest | Gary Ashworth (Ch) | 22 Nov 12 | 5,000 | 50 | 2,500 | 12,759,912 | 38.48 |
| Minco | Rowan Maule | 26 Nov 12 | 825,000 | 2 | 16,500 | 825,000 | 0.24 |
| Panther Securities | Simon Peters | 19 Nov 12 | 2,500 | 307.5 | 7,688 | 173,500 | 1.03 |
| Petroceltic | Alan Parsley | 22 Nov 12 | 144,000 | 6.84 | 9,850 | 144,000 | 0.003 |
| Plexus | Christopher Fraser | 21 Nov 12 | 5,000 | 200 | 10,000 | 10,000 | 0.01 |
| Plexus | Graham Stevens (fd) | 23 Nov 12 | 2,500 | 214 | 5,350 | 15,100 | 0.02 |
| PureCircle | Paul Selway-Swift | 23 Nov 12 | 10,000 | 240 | 24,000 | 412,171 | - |
| SDL | Mark Lancaster (ch, ceo) | 27 Nov 12 | 170,532 | 439.82 | 750,040 | 668,946 | 0.83 |
| Shaft Sinkers | Alon Davidov (ceo) | 21 Nov 12 | 78,554 | 38 | 29,851 | 78,554 | 0.17 |
| Shaft Sinkers | Christopher Hall (cfo) | 22 Nov 12 | 10,000 | 38.5 | 3,850 | 10,000 | 0.02 |
| Sierra Rutile | Jan Castro (ch) | 20 Nov 12 | 70,000 | 53 | 37,100 | 891,000 | 0.17 |
| Throgmorton Trust | Lord Latymer | 22,26 Nov 12 | 5,130 | 195.34,194.75 | 10,022 | 28,851 | 0.04 |
| Trinity Mirror | Donal Smith | 23 Nov 12 | 61,900 | 81.17 | 50,244 | 61,900 | 0.02 |
| VinaLand | Charles Isaac | 23 Nov 12 | 50,000 | US$0.43 | US$21,500 | 169,000 | 0.03 |
| Witan Investment Trust | Andrew Bell | 26 Nov 12 | 10,000 | 486.206 | 48,621 | 110,000 | 0.058 |
| Worldwide Healthcare Trust | Douglas McCutcheon | 23 Nov 12 | 15,000 | 828.87 | 124,331 | 15,000 | 0.03 |
Sells
| Company | Director | Date | No. of shares | Price (p) | Value (£) | Holding (shares) | Holding (%) |
|---|---|---|---|---|---|---|---|
| Bodycote | T Glende | 23 Nov 12 | 7,332 | 394.8 | 28,947 | 117,924 | 0.06 |
| Computacenter | Stephen Benadé | 22 Nov 12 | 6,000 | 385 | 23,100 | - | - |
| InternetQ | Konstantinos Korletis (ch) | 23 Nov 12 | 300,000 | 182 | 546,000 | 501,875 | 1.45 |
| N Brown | Lord Stone of Blackheath | 23 Nov 12 | 3,619 | 355 | 12,847 | 5,428 | 0.0019 |
| Smiths News | Graeme Underhill | 23 Nov 12 | 194,598 | 158 | 307,465 | - | - |
| Xstrata | Charlie Sartain | 23 Nov 12 | 350,000 | 1,020 | 3,570,000 | - | - |
| XXI Century | Emmanuel Blouin | 23 Nov 12 | 3,000,000 | 2.20 | 66,000 | 4,317,221 | 0.78 |
Table compiled by Robert Ansted
Key to abbreviations: ch = chairman; ce = chief executive; cfo = chief financial officer; fd = finance director; coo = chief operating officer; cs =company secretary; md = managing director
