Superdry

Superdry (LSE: SDRY) is a clothing company. It designs, produces, and sells clothing items and accessories. This is done primarily under the Superdry brand. With the Superdry share price down by 35% this year, a huge director transaction was executed. The purchase of a large sum of shares could boost investor sentiment.

• Name: Julian Dunkerton
• Position of director: Chief Executive Officer
• Nature of transaction: Acquisition of shares
• Date of transaction: 27 May 2022
• Amount purchased: 1,805,172 @ £1.42
• Total value: £1,144,954.58

Foxtons

Second on the list of director dealings is Foxtons (LSE: FOXT). The firm is a British-based estate agency. Foxtons serves as a go-between to buy, sell, and let properties. The Foxtons share price has had a slight hiccup this year, down 5%. A high-ranking director took the opportunity to purchase a substantial amount of shares.

• Name: Nigel Rich
• Position of director: Chairman
• Nature of transaction: Acquisition of shares
• Date of transaction: 30 May 2022
• Amount purchased: 140,000 @ £0.39
• Total value: £54,180

Big Technologies

Last on the list of director dealings is Big Technologies (LSE: BIG). Big Technologies provides products and services to the remote and personal monitoring industry. It does so under the Buddi brand name in the United Kingdom, Australia, the US, and Colombia. Its share price is firmly in the red at -15% this year. However, this didn’t stop a top director from transferring a number of leftover shares to his self-invested personal pension (SIPP) account after buying and selling.

• Name: Daren Morris
• Position of director: Chief Financial Officer
• Nature of transaction: Acquisition of shares
• Date of transaction: 27 May 2022
• Amount purchased: 10,000 @ £2.91
• Total value: £29,100

• Name: Daren Morris
• Position of director: Chief Financial Officer
• Nature of transaction: Disposal of shares
• Date of transaction: 27 May 2022
• Amount sold: 10,000 @ £2.83
• Total value: £28,300

• Name: Daren Morris
• Position of director: Chief Financial Officer
• Nature of transaction: Acquisition of shares
• Date of transaction: 30 May 2022
• Amount purchased: 15,000 @ £2.82
• Total value: £42,300

• Name: Daren Morris
• Position of director: Chief Financial Officer
• Nature of transaction: Disposal of shares
• Date of transaction: 30 May 2022
• Amount sold: 15,000 @ £2.81
• Total value: £42,150

Types of shares in a SIP

To provide context, there are a few types of shares within a company’s share incentive plan (SIP). A SIP is an employee plan for companies within the UK to flexibly award equity to employees. Publicly listed companies normally exercise this option because it’s tax-efficient for both the employer and its employees.

In this instance, partnership shares were bought and sold from the deals listed. Employees are usually allowed to buy shares on a monthly basis through a SIP. But they can also buy shares at the end of an ‘accumulation period’. If there is one in effect, employees can buy shares at the market value either at the beginning or end of the period.

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Here, I’m going to highlight two UK stocks trading under £3 that I’d be comfortable buying today. Both of these companies look set to benefit from powerful long-term trends, and I think they have a lot of growth potential.

A top stock under £3

The first stock I want to highlight is Tritax Big Box (LSE: BBOX). It’s a real estate investment trust (REIT) that invests in large logistics warehouses and rents them out to blue-chip retailers, such as Amazon, Tesco, and M&S. Its shares can currently be picked up for around £2.25 a piece.

BBOX strikes me as a great way to play the UK e-commerce boom. Consumers today are increasingly shopping online and they want their goods delivered quickly. To operate efficiently, online retailers need modern, automated warehouse facilities that are strategically located and allow for goods to be distributed seamlessly. Tritax is a leader in this space with a best-in-class portfolio of warehouse assets. As the e-commerce industry continues to grow, BBOX should also continue to benefit.

One risk here is that, as a REIT, BBOX sometimes needs to raise additional money from investors through share placings to expand its portfolio. These can push its share price down in the short term.

However, I’m comfortable with this risk. That’s because these share placings help accelerate the company’s development programme and, ultimately, fuel long-term growth.

It’s worth noting that analysts at Berenberg recently initiated coverage of the stock with a ‘buy’ rating and a £2.50 price target.

Strong growth potential

Another stock under £3 I like the look of right now is Big Technologies (LSE: BIG). It’s a UK company that has developed technology that helps with the remote monitoring of individuals. This tech, which is sold under the Buddi brand, can help those facing cognitive and/or physical decline live independently. The share price here is currently around £2.97.

Big Technologies is growing at a fast pace which isn’t surprising given that the number of over-65s globally is growing quickly. Last year, for example, revenue was up 53% to £29.6m. Meanwhile, in the first half of 2021, the company generated revenue growth of 41%. Looking ahead, analysts expect the group to generate top-line growth of 24% for 2021.

One thing that stands out to me about Big Technologies is that CFO Daren Morris recently purchased stock. Regulatory filings show that on 15 October, the insider picked up 108,755 shares at a price of £2.96 per share.

I see this ‘director dealing’ as bullish. Morris has an investment background (he was previously a managing director at both UBS Investment Bank and Morgan Stanley) so is likely to have a good understanding of the company’s true value.

A risk here is the valuation. Currently, BIG shares trade at 52 times next year’s earnings. That’s quite high and doesn’t leave a huge margin of safety. If future growth is disappointing, the stock could fall.

Overall however, I think the long-term risk/reward profile here is attractive. I’d be comfortable taking a small position in this sub-£3 stock today.

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