As markets continue to move up and down amid all the recent volatility, company directors are seemingly continuing to buy on the dip and sell when the going is good.
Two of the most notable director deals recently come from FTSE 100 sports fashion retailer JD Sports Fashion (JD.) and FTSE 250 IT firm Softcat (SCT).
JD SPORTS CHAIRMAN POCKETS £13 MILLION
After a tumultuous few months for JD Sports and its share price given the impact of lockdown and its blocked merger with Footasylum, things are starting to look somewhat better for the firm as retailers begin to open up again.
And since hitting a low of 293p on 18 March, the company’s share price has since rebounded to trade around the 644p mark, a higher level than this time last year.
But given that issues around the economic fallout from the coronavirus pandemic still loom large, and analysts at RBC Capital fearing the shift to online shopping could hinder JD Sports’ long-term margin recovery, the magnitude of JD Sports’ share price recovery looks a little questionable.
The investment case is not helped by executive chairman Peter Cowgill’s decision last week to sell almost two million shares at 671.77p each, a transaction worth around £13.3 million in total.
It’s worth noting that Cowgill did take a 75% pay cut as the disruption from the pandemic started. Following the share sale, Cowgill retains a 0.67% stake in the business.
SOFTCAT MANAGING DIRECTOR SELLS £1.3 MILLION STAKE
On the surface IT company Softcat looks better placed than others to weather the coronavirus storm, something that was reiterated in a third quarter update released last month helping the shares, which didn’t sell off as much as the wider market.
In the quarter to 30 April, Softcat said it traded satisfactorily during the period with growth in revenue, gross profit and operating profit, while cash receipts from customers remained broadly in line with normal trends.
But the company did admit there remains a high degree of uncertainty in the coming months and warned it is not immune to challenges faced by the wider economy.
Against that backdrop, it is interesting to note that the firm’s managing director Colin Brown decided to sell 120,000 shares for around £11.10 each in two transactions worth a combined total of £1.3m.
Having bounced back strongly following the big market selloff, the company’s shares are well ahead of the 925p mark they were trading at this time last year.
