Insider: over £500k spent on these big stocks at 5-year low

Winter portfolio stock Safestore Holdings Ordinary Shares (LSE:SAFE) has received £410,000 of backing after its chief executive topped up his stake with shares trading at a five-year low.

Frederic Vecchioli’s move followed the self-storage company’s results-day forecast of cost headwinds in the year ahead, which added to market jitters over the UK economy.

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Shares fell 10% on Thursday and are down by a third since September amid the impact of the stubborn interest rate outlook across the real estate investment trust (REIT) sector.

The run leaves Safestore on track for its worst winter since Vecchioli took the helm in 2013.

The stock has risen in every 1 November-30 April period of the past decade and averaged a share price gain of 13.1%, ensuring a place in interactive investor’s seasonal investing strategy.

This year’s performance has bucked that positive trend as Safestore is the worst of the five stocks in Wild's Consistent Winter Portfolio 2024-25.

The shares closed last week at 618.5p, compared with the price of 628.4p paid by Vecchioli and the respective price targets of 700p and 850p for analysts at Peel Hunt and Stifel.

The City firms have Hold recommendations amid weak levels of business and consumer confidence.

Stifel said: “Safestore is well able to weather this storm given its strong balance sheet and highly capable management, and in normal equity markets a price/earnings multiple of 15-16 times would be a clear Buy signal.

“However, for now there is no immediate catalyst for the shares, nor the wider sector, hence our Hold rating.”

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Peel Hunt expects the City’s earnings forecast for this financial year to come down towards 40p a share, having been near to 43p prior to the results. Earnings of 42.3p a share were 11.7% lower in the year to October, as higher borrowing costs offset a resilient revenue performance.

The company anticipates there will be further inflationary pressure on operating costs in the current year, with an expected 7% to 8% increase on a like-for-like basis.

This includes the impact from store staff costs, business rates increases as a result of inflation uplifts, and the unwinding of transitional relief on rateable value increases.

Interest expenses are also expected to further rise by £6-7 million, mainly as a result of additional borrowing to finance the company’s development programme.

Ten new stores and extensions were completed during the year, and the company has a pipeline of an additional 26 stores with a maximum lettable area of 1.3m sq ft equivalent to a 16% increase in the standing portfolio.

It is the UK's largest self-storage group with more than 200 sites, including 138 in the UK and 30 in the Paris region. The portfolio has more sites inside the M25 and in central Paris than any rival, placing it closer to the wealthiest and more densely populated UK and French markets.

There’s a growing presence in other European countries, while the company recently entered a joint venture agreement in Italy through the acquisition of EasyBox with Nuveen.

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Safestore was founded 1998 before it bought the French business Une Pièce en Plus, which was founded by Vecchioli. It has been listed on the London stock market since 2007 and a member of the FTSE 250 since 2015.

Over the last 11 years, the group has grown the dividend by 24.6p a share and returned a total of 216.5p a share. The 2023/24 total rose by 1% to 30.4p, including plans to pay 20.4p on 15 April.

Vecchioli said the award highlighted the company’s confidence: “Our business performance remains robust with strong levels of cash generation and our development programme is adding the potential for meaningful earnings growth.”

On the same day as Vecchioli’s purchase, finance boss Simon Clinton bought £25,000 of shares at a price of 603p and non-executive director Avis Darzins picked up £10,000 at 628p.

A FTSE 100 stock going cheap?

A five-year low valuation was also the backdrop for a £100,000 purchase of JD Sports Fashion (LSE:JD.) shares by the retailer’s chief executive Régis Schultz.

His investment at 90p followed a 9% reverse for shares after the FTSE 100 company downgraded profit guidance for the second January update in a row.

JD reported strong trading over Black Friday and the two-week festive peak period, but November was tough and it also faced a highly promotional marketplace.

Revenues for the two months were 1.5% lower but the retailer maintained price discipline to deliver gross margins ahead of last year, with a clean inventory and strong cash management.

Schultz said: “While I am pleased overall with our performance, market headwinds were higher than we anticipated and therefore our full year profit forecast is slightly below our previous guidance.

“With these trading conditions expected to continue, we are taking a cautious view of the new financial year.”

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UBS said the lack of a meaningful acceleration in sales during the holiday season raised concerns for calendar 2025, and also whether the chain is able to outperform the market without a material recovery by key partner Nike.

The bank cut its price target by a third to 103p and downgraded from Buy to Neutral.

Peel Hunt said JD hasn’t done much wrong but cut its target from 250p to 200p. It added: “We believe the long-term strategy is correct and JD will continue to lead the market, but we must rein in short-term hopes.”

Shares closed last week at 85p