Last time we checked in on insider share sale activity at the London Stock Exchange, the City darling was yet to receive clearance for its purchase of financial data group Refinitiv. With the stock also trading at £79 — then 36 times consensus earnings for 2020 — we suggested that the disposal made by director of information services Waqas Samad was at the very least understandable.
In the five months since, profits may have risen on spiking trading activity, but the Refinitiv deal has been snagged by European competition queries. The FTSE 100 firm also remains priced for perfection at £89.14 per share, which equates to 36 times consensus earnings for 2021, or a price-to-earnings growth ratio of 3.2.
Lucrative share award schemes have also made the intervening period a happy one for the LSE’s top brass. This is true for divisional lieutenants such as Mr Samad, who also acts as FTSE Russell chief executive. Since his March sale, he has been granted 54,990 share options, despite only being made a director in January 2019. Even after adjusting for sales to cover taxes, that amounts to a £3.5m bonus at current prices.
As such, one can hardly blame him for top-slicing 8,000 shares at £88.33 each on August 21, especially after group HR director Tim Jones sold 3,727 of his stock earlier in the month at £85.18.
Ninety One senior management have purchased close to £5m in the asset manager’s shares this month, after a July trading update confirmed a lift in its assets under management. The dealings were conducted via the Forty Two Point Two vehicle, which is used by Ninety One’s top brass to build their stake in the company.
Ninety One joined the London and Johannesburg stock exchanges in March this year after demerging from financial services behemoth Investec. It invests in a range of asset classes including equities, fixed income and alternative assets. Its debut full-year results in May, which covered its 12 months to 31 March, revealed headline earnings that sat around 10 per cent ahead of market forecasts, although its AUM shrank 7 per cent to £103.4bn.
While pre-tax profits were up 11 per cent, Ninety One admitted that the blow dealt to markets by coronavirus in March had made its aggregate performance look “decidedly average” over one and three years. Only 39 per cent and 55 per cent of its mandates beat their benchmarks over these respective periods.
Market confidence has returned since the depths of March, and the manager’s AUM rose by 14 per cent to £118bn at the end of quarter running to June 30. Forty Two Point Two owned around 20.3 per cent of Ninety One’s shares according to the July register, after which the vehicle engaged in a swath of share purchases. The asset manager’s employee benefit trusts have been active in buying Ninety One shares too, with its Guernsey trust racking up around £2.7m in purchases last month.
FactSet-compiled consensus forecasts are for full-year 2021 earnings per share of 13.9p, rising to 15.7p in 2022.