Shares digital

Former Mirror editor David Montgomery, now the executive chairman of European regional newspaper group Mecom (MEC:AIM), plus three of his non-executive colleagues, took advantage of share price weakness to top up their personal holdings.

The shares plunged last week after a poorly handled trading update, which had to be followed by a second announcement the following day to stop panic selling.

However, the directors were shrewd enough to buy before the clarification was published, therefore grabbing shares at 30p, although the stock has since eased down to 28.25p.

The original trading update failed to cover various issues such as the impact of the disposal of the Dutch paper De Trompetter, the likely 2008 depreciation and interest charges. Although none of these issues was covered in the initial trading update, brokers swiftly became aware of their impact. Thus there were two markets – a well-informed one serviced by those brokers in the know, and a less well-informed one. David Montgomery, as a working journalist, should have been able to avoid these banana skins. His failure to do so could influence sentiment towards the company.

The shares have been on the back foot for some months, and currently trade on a 2008 PE of less than six, yet while incremental improvements are likely this year, particularly on profit margins, this ill-handled announcement is likely to weigh on sentiment in the short term, especially as any slowdown in Europe’s major economies could affect the group’s advertising revenue.

Shares says: Investors should not feel under any urgency to buy. In the short term the shares are a mere