Big Director Buys In This Weak Market: Wm. Morrison Supermarkets plc, GKN plc and G4S plc

Directors at Wm. Morrison Supermarkets plc (LON:MRW), GKN plc (LON:GKN) and G4S plc (LON:GFS) have been splashing the cash during March.

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The FTSE 100 has been on the slide during March. In this spell of market weakness, directors at Wm. Morrison Supermarkets (LSE: MRW) (NASDAQOTH: MRWSY.US), GKN (LSE: GKN) and G4S (LSE: GFS) have been loading up on 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!

morrisonsWm. Morrison Supermarkets

Shares of the UK’s number four supermarket dived 12% when the company announced its annual results two weeks ago. The numbers were poor, but what really spooked the market was Morrisons’ plan to take on discounters Aldi and Lidl over the next three years with £1bn of price cuts.

Nevertheless, the Board expressed its confidence in the long-term future of the company, upping the final dividend by 10% and indicating a further rise of at least 5% for the current year. Furthermore, Morrisons’ five non-executive directors piled in en masse the day after the results, buying 87,738 shares between them at 203.1p for a joint outlay of over £178,000.

You’ll have to pay a bit more — 212p at the time of writing — if you fancy joining management in backing Morrisons’ long-term prospects. The price represents a below-market-average 13 to 14 times current-year forecast earnings, with a whopping potential dividend income of 6.4%.

GKN

The international automobile and aerospace engineering group has seen a strong rise in its shares over the last five years, reaching a peak of 415p ahead of annual results on 25 February. Management said it expects the group’s progress to continue in 2014, but the shares have fallen back from their pre-results high.

New finance director Adam Walker — poached from FTSE 250 media group Informa — took up his appointment on 26 February, and made his maiden purchase of GKN shares on 19 March. He invested over £250,000, buying 65,000 shares at 389.2p a pop.

You can buy a bit cheaper, around 380p, at the time of writing. Like Morrisons’, GKN’s forward earnings rating is in the 13 to 14 area, but unlike the supermarket, the dividend yield of 2.2% is well below the market average.

G4S

Blunders and scandals have dogged the world’s biggest security group over the past few years, which was one of the reasons for the appointment of Himanshu Raja as new chief financial officer last October. Raja has extensive experience in restructuring, and implementing financial reporting systems and processes to improve controls and visibility of business performance.

In its annual results announced on 12 March, G4S said that after an extremely challenging 2013, the actions it has taken have resulted in the Board looking to the future with confidence. The day after the results, finance director Raja pulled £116,500 out of his wallet to buy 50,000 shares at 233p.

You can buy at around the same price today, at 15.5 times forecast earnings, with a potential income of 3.7%.

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.

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