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Hargreaves Lansdown insider buys on upgrades

£196k stock purchase by non-executive director John Troiano followed two bullish analyst notes
October 28, 2020
  • Bullish remarks from City analysts coincides with a chunky insider purchase
  • Former Schroders executive John Troiano acquired £196k-worth of stock
IC TIP: Hold at 1,360p

On several important metrics, the third quarter of 2020 was another great one for Hargreaves Landsdown (HL.). Clients using the FTSE 100 firm’s DIY investment platform edged up 31,000 to 1.44 million, while strong share dealing volumes meant revenue was 12 per cent ahead of the same period in 2019, despite the FTSE All-Share Index trading 18 per cent lower.

The market instead “[chose] to focus on the £0.8bn of net inflows”, argued analysts at Numis. Believing investors are overlooking the structural growth story, expansion opportunities and a valuation “near a historical low”, the brokerage subsequently upgraded the stock to a ‘buy’.

Numis isn’t the only sell-side team to have refreshed the bull case. The following day, Peel Hunt increased its full-year earnings forecast by 5 per cent and bumped its recommendation to ‘buy’, arguing that concern around falling income earned on cash deposits is overdone. The previous week, headwinds to interest income sparked Canaccord to cut their FY2022 forecasts, even as it lifted its price target on expectations of stronger inflows.

Sharing the optimistic tone is John Troiano, who joined the DIY investment group’s board as a non-executive director in January. On 21 October, the same day Numis published its note, the former Schroders lifer acquired 14,400 shares over 38 separate transactions, at an average price of 1,363p.

On its own, the purchases are unlikely to catalyse a sudden re-rating in the shares. Nor for that matter are the broker upgrades, which have led to a mere 2.6 per cent rise in the consensus forecast for the year to June 2021 over the past month, per FactSet. The market now expects earnings of 52.4p per share for the period, and 50.7p for FY2022. At 1,360p, that equates to 27 times’ next year’s profits –fair for a quality long-term holding, but hardly cheap given the risks to market values. Hold.

Last IC View: Hold, 1,502p, 8 Oct 2020

Buys     
CompanyDirector/PDMRDatePrice (p)Aggregate value (£)Comments
SuperdryJulian Dunkerton (ceo)20 Oct 20149222,389 
Hargreaves LansdownJohn Troiano21 Oct 201,363196,134Average price
Oxford BiomedicaMartin Diggle22 Oct 20780194,895

Purchased by PCA

EnergeanEfstathios Topouzoglou16 Oct 20528112,100 
EnergeanEfstathios Topouzoglou15 Oct 20533106,600

Purchased by PCA

Capital & CountiesHenry Staunton22 Oct 20103103,295 
Capital & CountiesIan Hawksworth23 Oct 2010694,612

Purchased by PCA

SuperdryJulian Dunkerton (ceo)21 Oct 2015490,859 
Watches of SwitzerlandIan Carter (ch elect)23 Oct 2041278,515 
VictoriaGavin Petken23 Oct 2049940,000 
Triple Point Social Housing REITTracey Fletcher-Ray23 Oct 2010639,999 
BodycoteKevin Boyd27 Oct 2067720,312 
Sabre InsuranceJames Ockenden27 Oct 2023020,119 

 

Sells     
CompanyDirector/PDMRDatePrice (p)Aggregate value (£)Comments
Gamma CommunicationsAndrew Stone22 Oct 201,7501,050,000

Sold by PCAs. Andrew Stone is a trustee but not a beneficiary

Liontrust Asset ManagementJohn Ions (ceo)22 Oct 201,230814,875 
Liontrust Asset ManagementVinay Abrol (cfo)22 Oct 201,230814,875 
Gamma CommunicationsAndrew Stone19 Oct 201,755702,040

Sold by PCAs. Andrew Stone is a trustee but not a beneficiary

AvactaAlastair Smith (ceo)21-22 Oct 20180448,073

Average price. Residual interest 2.5%

BunzlJames McCool16 Oct 202,55857,639