Pru directors' spree pays off

That leaves Prudential on track to reach its target of doubling 2009’s new business profits by the year-end. Such progress has been good news for Prudential’s shares, which - at 1,099p - are up strongly on our longstanding buy tip (617p, 11 August 2011). Various Prudential directors have certainly been taking advantage of that share price momentum. Chairman Paul Manduca snapped up £213,500-worth of shares on 12 June, while newly appointed non-executive director (NED) Anthony Nightingale spent £163,500 on shares a day earlier. Fellow NED, Sir Howard Davies, meanwhile, bought a more modest £52,150-worth of shares on 13 June. With the shares trading at a not overly demanding 1.2 times Investec’s full-year estimate of embedded value, and as Prudential continues to grow, their buying spree looks set to pay-off.

John Adams

Good move by Banas

Catlin’s Richard Banas – chairman of the Lloyd’s insurer’s Asia Pacific and Canadian operations – snapped up 50,000 of the group’s shares this month; worth just under £232,000 in total. And that’s not such a bad move. To begin with, Catlin’s (CGL) performance looks good - last month’s first-quarter trading update revealed a 3 per cent rise in average premium rates, with no catastrophe losses at all so far this year. The first-quarter investment return reached 0.5 per cent, too – implying a decent enough annualised rate of 2 per cent. Yet the shares – at 438p – trade on just 1.1 times Numis Securities’ full-year estimate of net tangible assets, which is undemanding for the sector. They also offer a fat looking 6.4 per cent prospective yield. Moreover, Numis forecasts a combined ratio of 93.5 per cent for the full year - signalling a solidly profitable underwriting performance. With rates still hardening modestly – at least on catastrophe lines – and with a claims backdrop that’s the most benign it has been for years, we’re sticking with our buy tip (420p, 23 Feb 2012).

John Adams

Renold chief backs turnaround.

After a series of profit warnings last year, the new management team installed at industrial chains and gearbox maker Renold (RNO) is making a fresh start. And chief executive Robert Purcell is so confident things can only improve he’s bought another 1.5m shares at 25.25p, taking his spending spree since taking charge in January above £800,000. About £10m of writedowns plus a slug of restructuring costs were included in last month’s full-year results following a review of the core chain division. But that only partly explains the slump to a £7.7m pre-tax loss. Outmoded working practices contributed to “unacceptably high” operational gearing, and poor customer service was a big problem, too. Thankfully, these are issues that can be rectified and Renold has already stripped out excess capacity, refinanced its banking facilities, cut pension costs and found further savings. Yes, the business is highly cyclical and market conditions are tough, but the slowdown in order intake has continued to moderate and, at 27p, the shares are a speculative buy.

Lee Wild   

Buys

Sells

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