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Invicta - Execs Derisking |
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25 Mar 2014. A much loved reader has asked me to have a look at the director trades of Invicta. There is so much director trading going on, that I think let's start off by looking at the latest trades of C Barnard, the Chief Exec:
5 March 2014 : C Barnard sold 50,000 shares at R118.51.
10 March 2014 : C Barnard, Chief Executive bought 50,000 shares in a zero cost collar structure at a spot of R120.25, put strike of R120.25 & call strike of R139.91, expiring on 8 September 2015. What this basically means is that if the share price falls below R120.25 he walks away with what he bought the shares for, he enjoys all the rise in price in the shares up to R139.91; but forfeights any further rise in the share price up to 8 Sep 2015.
It's not as bearish as just selling the shares, but Mr Barnard has basically derisked his position. I interpret this to mean that he (1) has concerns the share price will fall, and therefore has bought protection, and (2) thinks that if the share price does rise, it'll only rise up to R139.91 by 8 Sep 2015 (an annualised return of 11%) so is willing to pay for the protection by forfeighting the upside.
On the 6th March 2014. DI Samuels, a non-exec, bought 250,000 shares at R118 a share. He's a non-exec, so his signal strength is lower than an exec, but this is an extraordinarily large amount of money to be investing (then again, I don't know what percentage of his personal wealth it forms).
On the 4th of February 2014 the execus all purchased shares in terms of the share appreciation plan. This to me, as zero signal strength.
On the 17th January A Goldstone, an exec-director, sold 300,000 shares at R121, and then bought 200,000 in a zero cost collar with a put at R113.05. The net effect is that he's offloaded some shares and derisked the remainder.
This derisking of positions certainly wouldn't prompt me to buy, and if I was holding the shares I would be wondering whether I should similarly derisk my position. Of course I could be entirely wrong - and so could they :)
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