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Anglo insiders ride the super-cycle

Two insiders at the mining group have collectively offloaded £3.3m worth of shares
Anglo insiders ride the super-cycle
  • A more prudent line on investments regardless of pricing
  • A production boost in prospect over the medium-term

It is telling that Anglo American’s (AAL) chief executive Mark Cutifani recently stated that the mining group will take a measured line on investments, despite recent hype over a new commodity super-cycle.

As well he might. One of the abiding memories of the last period of record prices was the profligacy of executives from some of the world’s largest resource companies.

Perhaps the most infamous deal was attributable to Tom Albanese, the then newly appointed chief executive of Rio Tinto (RIO), who decided to mark his elevation to the top job in 2007, by snapping up Alcan, a Canadian aluminium manufacturer, for around $38bn (£27.3bn) – at the time, the world’s largest ever mining deal. Rio effectively created a new – though unsustainable – top in the market, and was eventually forced to write-down roughly two-thirds of the original purchase price.

Cutifani is clearly not interested in going down that road, even though demand prospects for Anglo’s copper, platinum and diamonds are wholly encouraging. So, it is doubtful that we will see a repeat of the imprudent kind of deal-making and one-upmanship which sapped strength from the miners’ balance sheets, thereby imperilling their ability to return capital to shareholders.

Yet with all the talk over the coming super-cycle, is now a good time to offload some of your resource holdings? Two of Anglo’s insiders Didier Charreton and Bruce Cleaver – the latter the chief executive of the DeBeers subsidiary – did just that, collectively hiving-off around £3.3m worth of shares following publication of the mining heavyweight full-year figures for 2020. We wouldn't follow suit – with a potential sizeable increase in production volumes over the next three to five years, we think Anglo is well positioned as anyone to exploit positive pricing trends. Buy at 2,913p.

Last IC view: Buy, 2,949p, 25 February 2021

Buys    
CompanyDirector/PDMRDatePrice (p)Aggregate value (£)
CLS HoldingsFredrik Widlund (ce)10 Mar 202122051,450
CLS HoldingsAndrew Kirkman (cfo)10 Mar 2021222110,760
DevroSteve Good (ch)10 Mar 202118436,880
Howden JoineryPaul Hayes (cfo)10 Mar 202171449,980
MondiMike Powell (cfo)10 Mar 20211,79099,273
Rathbone BrothersClive Bannister10 Mar 20211,640250,920
SageLee Perkins11 Mar 202158988,314
Serco GroupTim Lodge12 Mar 20211,27250,880
St James's PlaceEmma Griffin15 Mar 20211,24024,809
Standard Life AberdeenJonathan Paul Asquith09 Mar 202129688,878
Standard Life AberdeenSir Douglas Jardine Flint (ch)09 Mar 202129739,793
UDG HealthcareShane Cooke15 Mar 202176295,250
Ultra ElectronicsMark Josceline Sclater (cfo)09 Mar 20212,07568,819
Sells    
CompanyDirector/PDMRDatePrice (p)Aggregate value (£)
Anglo AmericanDidier Charreton10 Mar 20212,9282,553,743
Anglo AmericanBruce Cleaver10 Mar 20212,885721,250
Wizz Air HoldingsHeiko Holm (cfo)11 Mar 20215,515551,500