Six directors of FTSE 250 Georgian banking group BGEO (BGEO) have cashed in a combined £7.6m worth of shares over the past week and a half.
The heavy bout of selling comes off the back of third quarter results which saw BEGO report a 19% increase in underlying pre-tax profit to GEL106.9m (£33.1m). The director dealings also follow a 64% rise in the share price year to date.
BAD SIGN
Multiple directors selling very large amount of shares is rarely a good sign. Directors theoretically know a business better than anyone else. You would assume they would hold on to stock if they thought there was good reason for the share price to keep rising.
Occasionally there is good reason as to why a director would sell shares, such as needing money to buy a house or to fund a divorce. In the case of BEGO, six directors rushing to cash in equity would suggest they want to lock in profit.
A few of the directors have exercised options for stock awarded through bonus schemes, but the amount of shares pales in comparison to the amount of equity sold since late November.
ANOTHER SALE
The latest director to sell is chief risk officer George Tchiladze, who has sold stock worth £855,658. He also carries the title of deputy chief executive; so do five other directors.
We presume that’s a Georgian corporate characteristic whereby senior directors get that title in the same way as many companies in the UK have multiple managing directors.
Other sellers include BGEO's group CEO and the boss of the corporate/investment banking division.
BGEO is a finance group with interests in the retail and corporate banking sector, as well as stakes in real estate, a wine producer and distributor and utilities.
It also has a 65% stake in London-listed Georgia Healthcare (GHG). In fact, its chief executive Nikoloz Gamkrelidze is one of the BGEO directors to have sold shares in recent days - netting £214,820 from his disposal of stock.
