Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Directors Have Bought Big at Aviva, SABMiller, and Cairn Energy

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

LONDON -- The FTSE 100 index is up 8% since the start of the year and up 24% on its 52-week low. Nevertheless, directors at Aviva (LSE: AV  ) (NYSE: AV  ) , SABMiller (LSE: SAB  ) , and Cairn Energy (LSE: CNE  ) have been buying shares in their own companies in today's highflying market.

Blue-chip insurer Aviva reported below-expectations results on March 7. What's more, the company slashed its final dividend by 44% and warned investors to expect a cut of the same order for the next interim payout.

The shares dived 13% on the day. Cue heavy director buying, summarized in the table below.

Date of buy


Price Paid (pence)

Total Cost of Buy (pounds)

March 12

Mark Wilson



March 8

Sir Adrian Montague



March 8

Gay Huey Evans



March 7

Michael Hawker



New chief executive Mark Wilson's spend of almost half a million quid was his maiden purchase of Aviva shares. The other three buys, totalling more than 80,000 pounds, were made by nonexecutives.

You can currently buy Aviva's shares at a lower price than any of the directors paid. The shares are trading at 310 pence, or about seven times forecast earnings for the current year. The cut to the final dividend and the board's guidance for the next interim give a yield of 4.7%.

In contrast to Aviva, where directors bought after the shares crashed, SABMiller's shares have been on an upward trajectory, rising almost 50% in 10 months.

Mark Amour, a nonexecutive director of the FTSE 100 drinks giant, recently splashed out 104,115 pounds on 3,000 shares at 34.71 pounds a pop. Amour paid about 20 times forecast earnings for the year to March 2014 and gets a measly 2% dividend yield.

You can buy SABMiller's shares a little cheaper today -- 34.25 pounds at the time of writing -- but the high earnings multiple and low yield have barely changed since Amour's purchase on March 12.

Cairn Energy
The shares of Cairn Energy, the FTSE 250 oil and gas explorer, are pretty volatile, having been as high as 350 pence and as low as 250 pence over the past 12 months.

On March 20, three directors -- chief executive Simon Thomson, his deputy Mike Watts, and managing director Jann Brown -- all bought shares at 283.5 pence Their total spend was 125,000 pounds.

Cairn had net cash and a near-cash investment amounting to 1.8 billion pounds at its last balance sheet date of Dec. 31, 2012. The company's current market capitalization is 1.7 billion pounds at 279 pence a share. Again, as with Aviva and SABMiller, you can buy these shares at a slightly lower price than the directors paid.

Shrewd investors
I can't tell you whether these directors have made shrewd purchases at the prices they paid. But I can tell you about a free and exclusive Motley Fool report that analyzes the huge investment in a British blue chip by one man who certainly does have a track record of making shrewd investments: U.S. multibillionaire Warren Buffett. You can read this in-depth report today and decide for yourself whether Buffett has bought a blue-chip bargain. The report can be in your inbox in seconds -- simply click here.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2325821, ~/Articles/ArticleHandler.aspx, 9/27/2016 3:21:38 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,222.29 127.46 0.70%
S&P 500 2,159.20 13.10 0.61%
NASD 5,303.04 45.55 0.87%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/27/2016 12:01 PM
AV $434.94 Down -3.16 -0.72%
Aviva CAPS Rating: No stars
CNE $177.79 Down -5.51 -3.01%
Cairn Energy CAPS Rating: No stars
SAB $4440.52 Up +1.52 +0.03%
SABMiller CAPS Rating: No stars
AV $11.43 Up +0.03 +0.26%
Aviva CAPS Rating: *****