Directors Have Been Splashing The Cash At Tesco PLC, BAE Systems plc And Vedanta Resources plc

In a buoyant market, directors at Tesco PLC (LON:TSCO), BAE Systems plc (LON:BA) and Vedanta Resources plc (LON:VED) have been buying shares.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.


The FTSE 100 has been riding high in recent weeks, but that hasn’t stopped directors at Tesco (LSE: TSCO) (NASDAQOTH: TSCDY.US), BAE Systems (LSE: BA) (NASDAQ: BAESY.US) and Vedanta Resources (LSE: VED) buying shares in their own companies.

At what price did these directors nail their colours to the company mast, and how much did they invest? Read on!


The supermarket heavyweight has been struggling to turn around its UK business for the past two years, and a Christmas and New Year trading statement showed its woes continuing.

Following the update, Mark Amour, who was appointed a non-executive director last September, made his maiden purchase of shares. The former financial chief of Reed Elsevier bought 25,000 shares at 326.1p a pop. His £81,525 investment is equivalent to his entire Tesco non-exec fees for the year. Chairman Sir Richard Broadbent chipped in a couple of days later with a 10,000 shares purchase at the slightly higher price of 331.22p a share.

If you fancy Tesco, you can buy in cheaper today: 323p, at the time of writing. You’ll be paying around 11 times prospective earnings, with a potential income of 4.5%.

BAE Systems

The defence group’s shares were hammered last week, when the company said it expects earnings to fall in 2014, in part because of continuing US budget pressures.

New chairman Sir Roger Carr and non-executive director Chris Grigg were quick to take advantage of the price drop. The chairman splashed out £200,000 at 398p a share. Grigg, who is also the chief executive of British Land, invested £100,000 — jointly, with Fiona Grigg — at a bit over 406p a share.

You can still buy at 406p at the time of writing — which is between 10 and 11 times 2014 earnings based on BAE’s guidance. The dividend yield is around 5%.

Vedanta Resources

Over the past three months, the shares of this mining and oil company have been trading at levels not seen since the dark days of 2008/9. Legal wrangles in its Indian heartland and concerns about the corporate structure continue to dog the group.

Nevertheless, executive chairman and majority owner Anil Agarwal has been buying shares with a vengeance since December. During February alone he has purchased 1.38 million shares in six transactions The biggest tranches were at around 800p, but in the most recent — 210,000 shares last week — he was happy to pay 851p.

The shares are trading at 838p at the time of writing, which is an insanely high multiple of current-year expected earnings (the year end is March), but falling to 14 times forecast 2014/15 earnings. The potential dividend income is above 4%.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

> G A Chester does not own any shares mentioned in this article. The Motley Fool owns shares in Tesco.

More on Investing Articles

Investing Articles

Turning a £20k ISA into a stunning £38,023 a year passive income

Harvey Jones says investing regular sums in a Stocks and Shares ISA is a brilliant way of building up a…

Read more »

Growth Shares

Growth stock YouGov just fell 46%. Time to buy?

YouGov’s share price just fell from 820p to 440p after a poor trading update. Is now a good time to…

Read more »

Investing Articles

2 mouthwatering FTSE growth stocks I’d buy and hold for 10 years

Growth stocks purchased today could be the gateway to many years of capital growth and returns. Here are two picks…

Read more »

Investing Articles

Can the IAG share price really be as dirt cheap as it looks?

While most shares have recovered since the Covid days, the IAG share price is staying stuck to rock bottom. Surely…

Read more »

Investing Articles

BAE Systems shares are flying! Have I missed the boat?

Sumayya Mansoor looks into whether or not BAE Systems shares are still a good buy for her portfolio after the…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

1 heavyweight FTSE 100 share I’d buy as London retakes its crown

Some Footsie firms are extremely large, but that doesn't mean they couldn't get even bigger. Here's one such FTSE 100…

Read more »

Investing Articles

I’d buy 5,127 National Grid shares to generate £250 of monthly passive income

With a dividend yield of 6.5%, Muhammad Cheema takes a look at how National Grid shares can generate a healthy…

Read more »

Investing Articles

The FTSE 100’s newest member looks like a no-brainer to me!

This Fool explains why she sees the newest member of the FTSE 100 as a great opportunity after its recent…

Read more »