Insider: five bosses bag bargains as UK shares slump

Share prices have been falling sharply, convincing a whole bunch of directors to dig deep and invest heavily in their own companies. Here are some of the week’s most interesting deals.

The stock market decline in 2022 has been well-documented, triggered by an overvalued tech sector, rising inflation, higher interest rates, a falling pound, war in Ukraine and any number of other issues related to the cost-of-living crisis. But it’s in these situations that the best investment opportunities are often found.

When sentiment is so negative, the sell-off can be indiscriminate. High-quality stocks are marked lower with the rest of the market, and selling can be overdone, leaving many companies looking cheap.

That’s certainly what this handful of directors will have been thinking when they bought shares in their businesses at the end of one of the most eventful weeks in markets and politics for a long while.

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On Thursday, when the FTSE 100 closed at its lowest level since July 2021, GSK (LSE:GSK) chairman Sir Jonathan Symonds snapped up 3,220 shares in the pharmaceuticals giant at 1,324p, around 25% cheaper than they were in July.

The £42,600 purchase comes just days after GSK said finance chief Iain Mackay was retiring in May next year, to be replaced by Burberry’s Julie Brown. It also follows a slump in GSK’s share price in August amid concerns about US litigation and heartburn drug Zantac.

Amanda Blanc, CEO at life insurer Aviva (LSE:AV.) and a non-executive director at oil giant BP (LSE:BP.), dug deep on Friday, splashing out around £100,000 on shares in each company. The acquisition of 25,704 Aviva shares at 389p came as the FTSE 100 company lost almost 8% of its value last week. BP, in which Blanc bought 23,500 shares at 438.9p, has fared better than most as oil prices remain high, although even it traded down 4% for the week.

And there was further action at Aviva when Douglas Brown, the head of its UK & Ireland Life business, spent almost £500,000 on 115,723 shares at just under 389p each.

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There are bargains to be had at estate agent Foxtons Group (LSE:FOXT) too, according to chairman Nigel Rich who purchased 40,709 shares at 30.55p. Rising interest rates, fears of a recession and chaotic scenes last week when lenders pulled products following the mini-budget, only worsened concerns about demand and the state of the UK housing market.

And over at Lindsell Train Ord (LSE:LTI) investment trust, where the share price is down over 28% in the past 12 months, non-executive director Julian Cazalet decided it was a good time to buy. His 25 shares in the Nick Train run fund at £970 a piece cost him £24,000.

Eventful times at this AIM company

Away from the big five, further down the stock market food chain, £14 million AIM minnow MusicMagpie (LSE:MMAG) grabbed headlines as directors splashed out around £400,000 on shares in the online retailer of refurbished consumer technology.

The acquisitions by non-executive chair Martin Hellawell (800,000 at 12.73p), chief executive Steven Oliver (1,350,000 at 13.76p), finance chief Matthew Fowler (175,000 at 10.56p) and chief operating officer Ian Storey (725,000 at 13.69p) came on the day the company downgraded expectations for the second half of its financial year.

Weakness and margin pressure at its core consumer technology division, coupled with slower sales growth on the musicMagpie store, mean profit for the year to 30 November will be below expectations, it warned.

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Musicmagpie shares lost about half their value following the announcement, but it’s not the first time shareholders have had to stomach bad news. It issued a warning about margins in March, which also halved the share price. The current price of 13p compares with 193p and a valuation of over £200 million when the company floated on AIM in April 2021.