Big share purchases by company directors are always worth noting. Here's the lowdown on some recent buys.
It's always interesting to look at recent boardroom purchases. So let's take a look at some of the most eye-catching deals of recent weeks.
Antisoma
(LSE: ASM)
Directors at the cancer drug developer have been buying in force since early June.
The purchases follow Roche's decision to give up licensing rights to two of Antisoma's leading drugs. Roche's decision triggered a 50% fall in the share price as investors worried that the two drugs couldn't have much potential.
The most advanced of the two drugs is AS 1404, which disrupts blood vessels supporting cancerous tumours. Recent trial data was impressive.
Antisoma's CEO, Glyn Edwards, told me that Roche had pulled out for "commercial reasons." Edwards is confident that another pharmaceutical company will decide to license 1404 and he may be able to announce a deal in this calendar year.
The board appears to share Edwards' confidence and directors have bought around 2.2m shares since Roche's decision at various prices between 11 and 18p.
1404 has big potential, and if Edwards gets the deal, the current share price of 15p (£55m market cap) would look an absolute steal in hindsight. If Edwards' confidence proves to be misplaced, expect further share price carnage.
Cable and Wireless
(LSE: CW.)
Cable and Wireless is the UK's second largest telecom company and bulls reckon it's recovering successfully from its traumas following the technology crash.
Chairman Richard Lapthorne appears confident and he bought 400,000 shares last week at 112.75p a throw. That's a significant sum of money and Lapthorne now owns 3 million shares in total.
In the UK, Cable and Wireless is now concentrating on its corporate business. Abroad, it operates in 33 territories and it's the dominant fixed-line provider in the majority of those markets. Profits from those territories enable the company to pay a 4% yield.
But for the future, it's the UK corporate business that really matters. If the new strategy comes off, Lapthorne's purchase should make him a nice profit.
Games Workshop
(LSE: GAW)
Games Workshop has had a tough time since early 2005 when demand for Lord of the Rings product tie-ups slumped. However, recent results suggested the niche games designer/retailer is beginning to recover. Chief executive Tom Kirby told shareholders that Games Workshop was "returning to growth."
Kirby appears to believe his comments as he splashed out £218,000 on the company's shares last Friday at 344p a throw. Two other directors also added to their holdings on the same day and the shares closed last night at 368.5p valuing the company at £115m.
My colleague, Maynard Paton, was pleased by the recent rise as he recommended the stock to Champion Shares readers in May.
Homebuy
(LSE: HBG)
I own shares in Homebuy and they haven't been done very well for me so far. But I'm heartened by deputy chairman Tom Bartlam's decision to buy 100,000 shares last month at 231.5p a throw. The chairman bought a smaller number at the same time.
Homebuy makes its money by selling TVs and other appliances to poor people on hire purchase. It usually charges whopping interest rates in the region of 30%. Traditionally, Homebuy has been a pure direct sales business, but the company is now expanding into the High Street for the first time, which could generate plenty of further growth.
Indeed, if you believe broker forecasts, Homebuy is trading on a price/earnings ratio of just 7 for this year. That looks very appealing.
That said, there are two risks here. Firstly, the move into the High Street may prove to be too ambitious. Secondly, net debt is on the high side. Still, I'm happy to hold.
Ed owns shares in Homebuy.
