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4 shares the pros are buying and selling

Our regular roundup of trades by professional investors features Neil Woodford seizing on AA’s share price tumble.

by Selin Bucak, David Campbell on Aug 07, 2017 at 05:00

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Key stats
Market capitalisation£467m
No. of shares out418m
No. of shares floating283m
No. of common shareholdersnot stated
No. of employees172
Trading volume (10 day avg.)m
Turnover£142m
Profit before tax£16m
Earnings per share3.76p
Cashflow per share4.14p
Cash per share4.40p

Gocompare

Citywire AA-rated value specialist Alex Wright has sold down his stake in price comparison website Gocompare (GOCO) as the shares pull back slightly from a fresh record high reached last month.

Wright reduced his investment from almost 10% of the business £43 million at a share price of 111p, to below a disclosable level.

The shares were primarily held in his £3.3 billion Fidelity Special Situations fund, with a much smaller holding in his £654 million Fidelity Special Values investment trust and £420 million UK Smaller Companies funds.

Gocompare joined the stock market in November last year and following a sharp upturn last month, has since seen its asking price climb 54% over the last nine months.

That followed a trading update from the group forecasting first half profit 22% higher the prior year at £17.5 million on revenue 4% higher at £75.8 million.

Peel Hunt last week reiterated its ‘buy’ rating, on a price target of 120p.

Key stats
Market capitalisation£1,263m
No. of shares out610m
No. of shares floating608m
No. of common shareholdersnot stated
No. of employees7454
Trading volume (10 day avg.)5m
Turnover£940m
Profit before tax£74m
Earnings per share12.15p
Cashflow per share23.32p
Cash per share30.85p

AA Group

Citywire A-rated star manager Neil Woodford has taken advantage of a share price hit to roadside recovery and motor insurer AA Group (AAAA) by increasing his stake in the company.

The manager of the £10 billion CF Woodford Equity Income fund took his stake to 13.1% from 12% on 1 August, as its shares tumbled. This equates to 79.9 million shares worth £166 million at a share price of 207.4p, down 25% year to date.

The stock was the 32nd biggest position in the Woodford Equity Income fund. The recently launched Woodford Income Focus fund also has a position. When news broke on Tuesday that AA had fired its executive chairman Bob Mackenzie for gross misconduct shares in the business took a dive, dropping 18% on the day.

Analysts at Liberum maintained their ‘buy’ rating on the stock, with a target price of 300p, highlighting that its free cash flow was still strong. They said the sacking was unlikely to be fraud related while a company spokeswoman told Reuters that it was a ‘personal conduct matter’.

FBD Group

Citywire A-rated international small cap buyer Jed Weiss has upped his stake in Irish insurer FBD Group (FBH) as its shares test a high that has capped its price range over the last two years.

Weiss increased his holding to just below 4% of the business worth €10.7 million (£9.6 million) at a share price of 820 euro cents , just off a two-year high of 850c.

The shares are primarily held in his $3.4 billion (£2.5 billion) Fidelity Series International Small Cap fund, with a further stake held by AA-rated colleague Alex Wright’s Fidelity Special Values trust.

Ahead of half-year numbers due at the end of this week FBD has climbed to its highest asking price since the business tumbled 43% in 2015 on a big storm-related pay out and executive departures.

Ireland’s Goodbody Stockbrokers rates the company a ‘buy’, on a 895c price target.

Key stats
Market capitalisation£300m
No. of shares out79m
No. of shares floating47m
No. of common shareholdersnot stated
No. of employees523
Trading volume (10 day avg.)m
Turnover£370m
Profit before tax£8m
Earnings per share10.91p
Cashflow per share16.55p
Cash per share25.38p

Midwich Group

Citywire AAA-rated small cap veteran Harry Nimmo has pared his investment in audio-visual hardware supplier Midwich Group (MIDWM) following its second sharp upward rerating so far this year.

Nimmo trimmed his holding in the business to 10.9%, worth £33 million at a share price of 380p, up 64% since the turn of the year.

The shares are held in his £1.3 billion Standard Life Investments UK Smaller Companies fund – the largest external shareholder – with a smaller stake in his £292 million UK Smaller Companies trust.

Midwich entered trading in May last year at 208p per share. The business tracked sideways until January when it was received a shot of adrenaline via an uprating by Investec. A second price target upgrade in July, from 375p to 400p, has more recently given it renewed momentum.

That followed a trading statement from the group reporting sales strength had put it ‘comfortably ahead’ of previous expectations.

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  • Gocompare.Com Group PLC (GOCO.L)
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  • AA PLC (AAAA.L)
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  • Midwich Group PLC (MIDWM.L)
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  • FBD Holdings PLC (FBH.L)
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