Price comparison site GoCompare (GOCO) slumps 5.3% to 99p as chairman Peter Wood offloads a sizeable chunk of his stake in the company at 100p.
Wood has sold 21.3m shares, reducing his holding in the company from 30.7% to 25%. Wood, who is putting the proceeds into his investment portfolio, reaffirms his commitment to the group.
He says: ‘GoCompare has an extremely bright future and I very much look forward to continuing as chairman and major shareholder.’
Weak share price performance in the immediate aftermath of its demerger from insurance firm Esure (ESUR) last year led us to add the stock to our Great Ideas portfolio but after a strong run we became more cautious this summer and the shares have subsequently fallen more than 10%, factoring in today’s slide.
THE BULL CASE
Not everyone is so cautious. Investment bank Berenberg recently initiated coverage on the stock with a ‘buy’ recommendation and 130p price target.
It notes management initiatives have the scope to materially improve margins in the coming years and, with the company set to deliver double the earnings growth of rival Moneysupermarket.com (MONY) based on its estimates, it sees a 30% discount to its larger rival as an attractive entry point.
