Offices, airlines and financial companies that make money from the stock market would appear to be among the hardest hit from the coronavirus outbreak.

After all, with more people working remotely and large sections of the economy shutdown for the foreseeable future, office space is hardly the most in-demand thing right now.

While the airline industry as a whole faces a very uncertain future with almost all flights across Europe and the world cancelled for an indeterminate period of time.

And financial companies like fund management groups, whose own financial performance can be significantly affected by stock markets, have been hit hard by the recent bout of volatility.

But bosses of all three have used weaknesses in their companies’ share prices to up their stakes.

OFFICE BOSS SNAPS UP 4M SHARES

The most notable deal comes from IWG (IWG) chief executive Mark Dixon, who purchased more than 4m shares over a series of transaction in the past week, for a total value of around £5.5m, paying a weighted average price of roughly 115p per share.

Shares in the serviced office provider have fallen over 60% year-to-date, after hovering around the 440p mark at the start of the year.

Some investors have concerns the coronavirus outbreak could lead to some permanent changes in working practices as more people and companies become accustomed to working remotely.

However, the firm points to ‘long-term structural growth drivers’ in the global flexible work market, while its offices in China have since re-opened.

VETERAN INVESTOR ADDS MORE WIZZ

Another notable buyer has been Wizz Air (WIZZ) chairman Bill Franke. The 82-year old American has been investing in airlines for decades, and is known as the pioneer of low cost air travel.

Last week he bought 30,000 more shares in Wizz Air at a price of £23.55 each, investing a total of £706,000.

Airlines have been one of the hardest hit by the coronavirus outbreak, and the future for many looks far from certain.

But Wizz Air has remained upbeat, despite its share price falling from just under £45 six weeks ago to around £22.70 today.

Franke’s investment looks all the less surprising when considering comments made by chief executive Jozsef Varadi to Hungarian media two weeks ago.

Varadi said, ‘The majority of the industry simply postpones or cancels aircraft purchases. We will be doing the exact opposite. We'll bring in aircrafts earlier than planned.

‘One can turn the current situation to its advantage, we see potential for future growth in the current situation. There will be available positions on the market once the weak companies disappear.’

M&G CHIEF EXEC AND INVESTMENT BOSS BUY IN

While lower on the scale in monetary value, two transactions at asset manager M&G (MNG) have also been particularly interesting.

Chief executive John Foley and chief investment officer Jonathan Daniels took advantage of a fall in the company’s share price as each bought £166,000 worth of shares, both snapping up 150,000 shares at 111p each.

The company now has one of the cheapest valuations in its sector with a 12-month forward price-to-earnings ratio of 5.5 times according to Stockopedia, well below the sector average. However, there’s a reason the stock is cheap as it remains to be seen how long market volatility will continue.

M&G shares have fallen over 40% year-to-date following big market selloffs, as well as the company’s underwhelming 2019 results with pre-tax profit down 41% to £1.15bn, compared to £1.62bn in 2018.

 

For a full list of the week's most significant director deals, click here.

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Issue Date: 26 Mar 2020