Insider: director buying hits £750k at struggling FTSE 350 pair

Leading directors at Hiscox Ltd (LSE:HSX) and the FTSE 250-listed precision measurement firm Spectris (LSE:SXS) have spent a combined £750,000 backing their shares at levels near to lows for the year.

The purchases of £100,000 each by Hiscox chief executive Aki Hussain and finance boss Paul Cooper took place at 1,023p, having seen shares in the FTSE 100 specialty insurer fall from 1,271p prior to August’s interim results.

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They made their moves shortly after Thursday’s third-quarter results, which revealed steady premium growth alongside guidance that catastrophe losses are within this year’s budget.

This includes the impact of Hurricane Milton, which caused devastation in Florida in early October. Hiscox estimates its loss at $75 million based on the industry-wide hit of $40 billion.

The Milton cost figure, which is split between the company’s London market and its reinsurance division, follows four earlier US hurricanes as well as flooding in Europe.

With the company able to absorb this year’s catastrophe losses, it pledged to consider whether to return excess capital to shareholders alongside February’s annual results.

Shares still fell 4%, however, as the trading update failed to ease recent City worries over the slower pace of growth in the US direct and partnerships division of Hiscox Retail.

Across the group, written premiums increased by 3% to $3.9 billion amid the company’s focus on “high quality” growth in Retail and deployment of capital into attractive big-ticket lines.

The shares are now back where they started the year, but broker Peel Hunt believes there’s a potential upside to 1,410p, while UBS had a target of 1,495p prior to last week’s update.

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The buying at Spectris followed its warning on 31 October about the impact of continued softness in its China market, particularly in pharmaceuticals and academia.

With shares below 2,500p for the first time this year, board chair Mark Williamson spent £300,000 increasing his stake last Tuesday at a price of 2,476p.

Non-executive director Mandy Gradden committed £200,000 on the same day at 2,506p, while finance director Angela Noon disclosed a purchase worth about £40,000.

The insider moves gave a big boost to City confidence as shares opened Wednesday’s session sharply higher before ending last week at a much improved 2,586p.

The shares have a strong track record of performing well over the winter months, having delivered growth for nine of the past 10 years at an average return of 15%.

That performance - with the blip coming in 2021 - means Spectris has been included as one of the five stocks in this year’s edition of Wild’s Consistent Winter Portfolio.

Spectris always expected 2024 to be a slower year, before returning to growth in 2025 and 2026 as it benefited from major acquisitions such as Boston, Massachusetts-based SciAps.

The move for the specialist provider of handheld instruments used in materials analysis will boost positions in markets including mining, batteries and pharmaceuticals.

In the meantime, profits for this year are expected to be in the region of £200 million as cost reduction efforts help to offset the 10% fall in like-for-like sales in the third quarter.

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Unlike Hiscox and Spectris, the top two directors at Mears Group (LSE:MER) last week bought shares with the housing and care services provider on the front foot.

Chief financial officer Andrew Smith picked up £90,000 of Mears shares on Wednesday at a price of 363.7p, two days after chief executive Lucas Critchley spent £36,000 at a similar level.

The FTSE All-Share business finished the week at 374p, within 20p of the high for the year set in late May. They’ve bounced 16% in less than a month after Mears recently forecast 2024 results well ahead of previous expectations, the second upgrade since the summer.

Profits should be at least £60 million, with the upside from £46.9 million in 2023 and previous guidance of £55 million partly due to margin expansion within maintenance-led activity.

Critchley, who was promoted to the CEO’s role in January, said the business continued to “deliver well against its clearly defined strategy”.

He has the support of analysts at Deutsche Bank based on a 435p target price. They said: “Targeted operational and commercial improvements in the group’s core housing activities have again outperformed our expectations.”

The company manages and maintains around 450,000 homes across the UK, predominantly on behalf of central and local government and typically through long-term contracts.

Mears was recently named among the top ten big companies to work for in the Best Companies’ annual league table. It employs 5,600 people and has a presence in England, Scotland and Northern Ireland, offering a range of jobs from specialist trade and housing roles to central administrative support.