Insider: a near £2m purchase in this sector top pick

A £1.6 million purchase by the co-founder of Foresight Group Holdings Ltd Ordinary Share (LSE:FSG) has increased his stake at a price cheaper than when the infrastructure investor floated exactly four years ago.

Foresight said Bernard Fairman’s move and one worth £346,510 by chief operating officer Gary Fraser reflected “their confidence in the company successfully achieving its growth ambitions”.

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Their dealings took place on Wednesday at a price of 400p, which compares with 420p when Foresight joined the stock market in February 2021.

The FTSE 250-listed shares were 538p in September before reversing as far as 355p in mid-January amid the uncertainty of the Budget and elevated outlook for interest rates.

Foresight’s valuation has suffered despite it meeting targets set out at the IPO and executive chairman Fairman’s pledge to double core earnings in the five years to the end of 2029.

Government backing for a raft of infrastructure projects to help grow the economy also presents a tailwind opportunity for Foresight, whose investment focus is on cleaner energy systems, decarbonising industry and growing the potential of ambitious companies.

Fairman jointly set up Foresight in 1984 and has helped to turn it into a leading investment manager in real assets and capital for growth operating across the UK, Europe, and Australia. Assets under management (AUM) were £12.2 billion at the end of December.

Foresight boosted its growth ambitions last month by adding £800 million of AUM in three separate developments, chiefly the acquisition of WHEB Asset Management. It runs a single global mid-cap equity strategy that is focused on impact investing.

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Panmure Liberum has a price target of 740p and regards Foresight as its sector top pick.

The broker likes the diversification of Foresight’s three divisions in infrastructure, private equity and capital management, as well as its separate investor bases of retail and institutional and a range of different fund structures.

It also highlights the “boots on the ground” approach as Foresight’s local presence and network allow it to source opportunities directly and be selective about where it invests.

The shares trade on a 2025 price/earnings multiple of 9.3 times, which compares with Panmure Liberum’s private asset manager peer group on 23.5 times.

It added: “We continue to believe the market is significantly undervaluing the highly predictable recurring revenues and earnings this company generates relative to the rest of the peer group. A 2025 dividend yield of 6.8% is also attractive.”

Peel Hunt last week reduced its price target to 480p but reiterated its Buy recommendation and said a strong balance sheet meant dividend growth and further capital returns were a core attraction for shareholders.

It said: “Cheaper/higher yielding stocks may be available in the sector, but we believe Foresight offers slightly different exposures: real assets and the provision of growth capital that has delivered a compound AUM increase of more than 20% over the longer term.”

Last week’s investments took the collective shareholding of Fairman and Fraser up to the maximum permitted 33%. Neither have sold any shares since the IPO in 2021.

Are Speedy shares going higher?

Two directors of Speedy Hire (LSE:SDY) have spent a combined £24,000 backing the equipment hire company’s shares in the wake of a profit warning at the start of last week.

The purchases involving chief financial officer Paul Rayner and non-executive director Shatish Dasani were priced at less than 20p, having seen the FTSE All-Share company trade at 27.5p prior to the update.

Merseyside-based Speedy reported promising growth in the third quarter, including hire revenues for December 5% ahead of the previous year.

However, the positive momentum going into the current quarter has been negatively impacted by economic conditions and delays to improvement works in the rail sector.

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The company, which operates 144 service centres, has pledged to focus “on what we can control” and is committed to its Velocity strategy aimed at building a sustainable hire business.

It added: “The group has a promising pipeline of growth opportunities with new and existing customers, and should benefit from increased government spending on infrastructure projects.”

Broker Peel Hunt is confident in the longer-term prospects but has reduced its target price from 60p to 50p to reflect near-term developments.

It said the valuation is underpinned by an estimated asset value of 39p a share and yield in the region of 13%.

The broker added: “Management action is being masked by the highly challenging backdrop, but the patient investor is being rewarded by the dividend, which on our estimates is covered by cash in 2026 and 2027.