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Diageo rebounds after profit warning

The spirits company's chairman bought the dip following the recent profit warning
October 25, 2018

Diageo (DGE) chairman Javier Ferrán topped up his shareholding during a recent trough in the spirits company’s share price. Towards the end of September, the drinks group warned that foreign exchange rate volatility in emerging markets would wipe £175m off net sales and £45m off operating profit this financial year, sending the shares down by way of reaction. It was at this point that Mr Ferrán spent more than £757,000 on enlarging his shareholding.

IC TIP: Buy at 2689p

But the subsequent share price recovery is justified for two reasons. First, the forecast trim isn’t material considering the scale of Diageo’s operations: last financial year the company reported £12.2bn in net sales, with £3.7bn of operating profit. Second, currency movements aren't indicative of operational issues. In fact, chief executive Ivan Menezes still expects operating margins to expand by 175 basis points come June 2019, with the group also in the process of repurchasing £2bn-worth of shares.

Buys       
CompanyDirectorDateNo of sharesPrice (p)Value (£)Holding (shares)Holding (%)
Altitude  Graeme Couturier11 Oct 1815,66671.4911,20015,6660.029
Anglo Pacific  Patrick Meier (ch)11 Oct 1814,25013819,665231,9270.128
Arc Minerals*Jonathan de Thierry 15 Oct 1866,6674.53,00013,559,5552.149
Arc Minerals*Donald Bailey15 Oct 18222,2234.510,0007,263,8901.151
Arc Minerals*Brian McMaster15 Oct 18222,2234.510,0002,222,2230.352
Arc Minerals*Nicholas Von Schirnding (ch)15 Oct 182,222,2234.5100,00013,326,1982.112
Audioboom  Michael Tobin (ch)11 Oct 18188,5081.382,6012,265,0190.193
Bigblu Broadband Michael Tobin (ch)11 Oct 1831,5789529,999206,0990.363
Bodycote Anne Quinn (ch)11 Oct 1810,000803.980,39011,0000.006
Boot (Henry) Darren Littlewood (fd)11 Oct 185,00027013,50077,5000.058
Breedon  Patrick Ward (ceo)11 Oct 1875,00064.748,525397,8470.024
City Pub*Clive Watson (ch)15 Oct 1868,182220150,0002,638,7144.304
ConvaTec  Jesper Ovesen15 Oct 185,000141.37,065133,8890.007
ConvaTec  Jesper Ovesen15 Oct 1840,000141.856,720128,8890.007
ConvaTec  Frank Schulkes (cfo)15 Oct 1865,000150.4297,773165,0000.008
Diageo Javier Ferrán (ch)12 Oct 1830,0002524.95757,485179,6440.007
Diversified Gas & Oil Bradley Gray (fd)11 Oct 1812,500107.513,4382,222,9810.410
Frontier Developments♥James Mitchell11 Oct 187,3571058.677,88187,9230.228
Grafton  Michael Roney (ch)11 Oct 1810,90369075,23122,4320.009
Harworth  Owen Michaelson (ceo)15 Oct 1841,32212150,000316,4120.098
Harworth  Owen Michaelson (ceo)16 Oct 1840,53012249,447356,9420.111
hVIVO James Winschel 12 Oct 186,42062.34,00079,5580.099
Invesco Income Growth Trust Tim Woodhead11 Oct 186,000259.6715,5806,0000.010
ITE  Mark Shashoua (ceo)15 Oct 1850,00062.331,1501,146,5210.156
ITE  Mark Shashoua (ceo)15 Oct 1830,0006318,9001,096,5210.150
JKX Oil & Gas Christian Bukovics12 Oct 1830,00041.412,42030,0000.017
JPMorgan Asian Investment Trust June Aitken15 Oct 1810,00031131,10010,0000.011
Midwich  Stephen Lamb (fd)11 Oct 181,000576.255,7636,0000.008
Midwich  Stephen Lamb (fd)11 Oct 181,000584.995,8507,0000.009
Midwich  Stephen Lamb (fd)11 Oct 18500584.992,9257,5000.009
Moneysupermarket.com  Bruce Carnegie-Brown (ch)11 Oct 1840,000263.2955105,31890,0000.017
Murray Income Trust Stephanie Eastment 12 Oct 187007165,0121,9250.003
Nanoco  Brian Tenner16 Oct 18158,5433250,734158,5430.055
Next Michael Roney (ch)11 Oct 184,6515348248,73533,7780.024
Next Michael Roney (ch)12 Oct 18920543049,95634,6980.025
Oakley Capital Investments Peter Dubens12 Oct 1858,920185109,0029,218,9724.501
Oakley Capital Investments Peter Dubens11 Oct 1875,000187140,2509,160,0524.473
Pacific Assets Trust James Williams (ch)12 Oct 1810,00024824,80050,0000.042
Paragon Entertainment Mark Pyrah12 Oct 18261,1931.684,38819,366,34110.319
Personal Assets Trust Robin Angus16 Oct 184393501,5744,7520.208
Personal Assets Trust♥Robin Angus16 Oct 185393501,9684,7620.208
Personal Assets Trust Robin Angus16 Oct 18539375.41,9694,7480.208
Personal Assets Trust♥Robin Angus16 Oct 18539375.41,9694,7570.208
SDL Glenn Collinson12 Oct 186,500472.1130,68743,0000.047
Sequoia Economic Infrastructure Inc Fund Robert Jennings (ch)12 Oct 1822,80010624,168240,0000.023
Sequoia Economic Infrastructure Inc Fund Sandra Platts12 Oct 182,9341063,11019,0730.002
Synairgen*Phillip Monk15 Oct 1846,875167,500230,3140.211
Synairgen*John Ward (fd)15 Oct 1862,5001610,000339,0060.310
Synairgen*Richard Marsden (ceo)15 Oct 18156,2501625,000310,6820.284
TT Electronics Michael Baunton11 Oct 182,2562204,96383,8100.051
TT Electronics Michael Baunton11 Oct 184,5172209,93788,3270.054
TT Electronics Michael Baunton11 Oct 189,02922019,86497,3560.060
TT Electronics Michael Baunton11 Oct 181,1222202,46898,4780.060
TT Electronics Michael Baunton11 Oct 181,1202212,47599,5980.061
Volution  Ronnie George (ceo)11 Oct 1810,00017017,0005,632,8332.832
YouGov Ashley Martin 12 Oct 185,61744524,9965,6170.005
Sells       
CompanyDirectorDateNo of sharesPrice (p)Value (£)Holding (shares)Holding (%)
Surgical Innovations  Nigel Rogers (ch)16 Oct 18416,8302.9512,2966,610,0000.845
* placing/tender/open offer ♥ spouse/connected party