It always pays to take note when the insiders are heavily buying shares in their own company. That’s because more often than not it’s a precursor to positive news emerging in the months ahead.
Bearing this in mind, I was intrigued when Phillip Rose, a director of Alpha Real Trust (ARTL:160.5p), an investor in high-yielding property and asset-backed debt and equity investments, splashed out £1m buying shares at 133p last summer to raise his stake six-fold to 1.3 per cent of the issued share capital.
It was not difficult to see why as the shares were trading 25 per cent below net asset value of 178p even though there was a realistic possibility that Alpha would realise some hefty gains on its investment portfolio. I had no hesitation reiterating my buy recommendation, at 133p at the time (‘Alpha’s capital creation’, 1 October 2018). It proved the right call as a quarterly trading update has revealed that Alpha’s net asset value (NAV) per share soared by 15 per cent to 205.6p in the final three months of 2018, buoyed by the disposal of a five-storey data centre in Frankfurt, Germany encompassing 450,000 sq ft, and a 664 unit private rental sector development in Monk Bridge, Leeds. The data centre was sold for €20m more than the €24.8m (£22.1m) carrying value in Alpha’s September 2018 accounts, and the Leeds site realised £15.4m, or £3.1m above book value, having been re-valued significantly since acquisition at the end of 2015.