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Reckitt Benckiser chairman buys on dip

The pandemic has driven sales in hygiene and health products
Reckitt Benckiser chairman buys on dip
  • Reckitt Benckiser shares have edged downwards following a spate of coronavirus vaccine announcements
  • Chairman Christopher Sinclair and his wife have purchased nearly £250,000 in company shares
IC TIP: Buy at 6,402p

Reckitt Benckiser (RB.) can accurately be considered a beneficiary of this year’s pandemic. In October, the consumer goods giant said that strong demand for the group’s hygiene and health products had pushed its sales up over its first three quarters by 9.4 per cent compared with 2019. Between March and August, Reckitt shares rose by more than a half, peaking at 8,020p at the end of July.

It’s perhaps of little surprise, then, that growing excitement surrounding new coronavirus vaccines has pushed Reckitt's shares down since the start of November. A return to pre-Covid social norms will almost inevitably see a decline in the amount of cleaning products we consume, and Reckitt's shares fell 5.8 per cent following Pfizer’s announcement. They have largely continued on their downward trajectory since. 

This weakness offered a sufficiently enticing entry point for chairman Christopher Sinclair and his wife, Margaret, who together bought £248,603-worth of Reckitt Benckiser's shares at 6,719p apiece.

The so-called winners of this pandemic will soon have to reckon with the unwinding of pandemic-linked share price gains. There are more strings to Reckitt’s bow than supporting frantic hand washing, however, and we don't think the recent softening of the share price is fully merited. The company noted last month that the unwinding of social restrictions in China and India had prompted a surge in condom sales, while trials of a new condom in China are progressing well. These products have supported growth in the company’s health division and will help Reckitt forge ahead in key developing markets. Buy at 6,402p.

Last IC View: Buy, 7,384p, 20 Oct 2020

Buys    
CompanyDirector/PDMRDatePrice (p)Aggregate value (£)
Land Securities GroupMark Allan (ceo)19 Nov 20682311,772
Reckitt BenckiserChristopher Sinclair (ch)20 Nov 206,719248,603
Spirent CommunicationsPaula Bell (cfo)19 Nov 20257128,740
Hargreaves ServicesRoger McDowell23 Nov 20219109,500
Sage GroupJonathan Howell (cfo)23 Nov 2058499,248
Hargreaves ServicesChris Jones23 Nov 2022184,945
Rentokil InitialVanessa Evans24 Nov 2049176,973
HalfordsTom Singer20 Nov 2026953,701
Euromoney Institutional InvestorLeslie Van de Walle (ch)19 Nov 201,05352,630
Ocean OutdoorAryeh Bourkoff (ch)17 Nov 2048648,563
Sage GroupAnnette Court20 Nov 2058629,280
QinetiQShonaid Jemmett-Page24 Nov 2031021,698

 

Sells    
CompanyDirector/PDMRDatePrice (p)Aggregate value (£)
CMC MarketsDavid Fineberg19 Nov 20390990,042
TBC BankGiorgi Shagidze18-20 Nov 201,299714,561
TBC BankVakhtang Butskhrikidze19-23 Nov 201,274681,750
TBC BankNikoloz Kurdiani19-23 Nov 201,267417,961
Derwent LondonSimon Silver23 Nov 203,182387,245
SSEColin Nichol18 Nov 201,411256,971
RSA Insurance GroupCharlotte Heiss19 Nov 20675202,344
Smith & NephewPhil Cowdy23 Nov 201,44285,279
GraingerVanessa Simms (cfo)19 Nov 2030776,825