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4 shares the pros are buying and selling

Our regular roundup of trades by professional investors, featuring WYG, Blanco Technology, Esure and National Express.

by David Campbell, Selin Bucak on Apr 23, 2018 at 05:00

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Key stats
Market capitalisation£29m
No. of shares out73m
No. of shares floating65m
No. of common shareholdersnot stated
No. of employees1568
Trading volume (10 day avg.)1m
Turnover£151m
Profit before tax£6m
Earnings per share3.27p
Cashflow per share8.64p
Cash per share9.33p

WYG (WYG)

Who’s trading? Citywire A-rated Mark Hall.

The trade: The Franklin Templeton UK Smaller Companies manager sold off his 5.2% stake in environmental consultancy WYG, previously worth £1.5 million at last week’s share price of 40p.

How have the shares performed? WYG has climbed sharply since hitting a record low of 33p in mid-April, but that has to be contextualised within a slump from 136p as recently as early 2017.

What does the company say? A series of downbeat updates and back-to-back profit warnings from WYG in 2017 acted as catalysts for investors to dump the stock. The balance sheet took a hit on rising costs, even as revenue remained resilient, with managers predicting a mid-year bounce back.

What’s the outlook? Broker FinnCap has maintained the faith with a 50p price target and ‘buy’ rating but rival N+1 Singer expects conditions for the group to get worse before they get better in 2019. Costs spiked as WYG upped capacity to fulfil delayed contracts expected to materialise this year.

Key stats
Market capitalisation£50.6m
No. of shares out64m
No. of shares floating59.4m
No. of common shareholdersnot stated
No. of employees273
Trading volume (10 day avg.)0.36m
Turnover£26.9m
Profit before tax£4.3m
Earnings per share-5.3p
Cashflow per share3.2p
Cash per share18.2p

Blancco Technology (BLTGB)

Who’s trading? Mark Costar & Vishal Bhatia.

The trade: The managers of the JOHCM UK Growth fund have added to their position in certified data erasure provider Blancco Technology, taking it 10.1% to 11.3% of the shares, worth £5.8 million at a share price of 80p.

How have the shares performed? Blancco’s shares took a dive over the last year, which saw the company issue a profit warning and a change in leadership. It has fallen to its current price from a 52-week high of 224p.

What does the company say? With a new chief executive at the helm Blancco is primed for growth as the incoming boss Matt Jones also stated: ‘there are many exciting prospects for us to pursue to create value for all of our stakeholders.’ While over the six months to December it narrowed losses, it still has a net debt of £3.4 million.

What’s the outlook? Blancco is expected to be a beneficiary of the new EU General Data Protection Regulation (GDPR) due to come into effect on 25 May. Following its most recent market update, Peel Hunt reaffirmed its ‘buy’ rating on the stock, setting a price target of 126p.

Key stats
Market capitalisation£943m
No. of shares out419m
No. of shares floating283m
No. of common shareholdersnot stated
No. of employees1623
Trading volume (10 day avg.)1m
Turnover£781m
Profit before tax£117m
Earnings per share19.00p
Cashflow per share21.20p
Cash per share11.14p

Esure (ESUR)

Who’s trading? Citywire A-rated Alex Wright.

The trade: The Fidelity value star slashed his holding in insurer Esure from 9.3% of the shares, worth £88 million at a price of 225p, to below a disclosable level of 5%.

How have the shares performed? It’s been all downhill for Esure since topping out at a record 301p in June last year, and the shares are now only just above the 209p they entered trading at in 2013.

What does the company say? Millionaire founder Peter Wood was forced to deny a boardroom bust-up was behind the sudden, surprise exit of chief executive Stuart Vann in January, following several months of City chatter about a rumoured plan for Wood to begin to sell down his 30% stake.

What’s the outlook? Brokers are cautious, holding Esure on a negative outlook at a three-to-one margin, on a median price target of 272p. Law changes to ban whiplash claims caused car insurance prices to fall 7% in the first three months of the year, in the first annual drop in pricing since 2015.

Key stats
Market capitalisation£2,078m
No. of shares out512m
No. of shares floating440m
No. of common shareholdersnot stated
No. of employees46264
Trading volume (10 day avg.)1m
Turnover£2,321m
Profit before tax£381m
Earnings per share22.89p
Cashflow per share58.14p
Cash per share61.42p

National Express (NEX)

Who’s trading? Citywire A-rated Clive Beagles and James Lowen.

The trade: The managers pared their stake in coach operator National Express from just over 5% of shares to 4.9%, worth £103 million at a price of 406p.

How have the shares performed? National Express has surged 8% this year to a post-crash high, taking its three-year return to almost 40%, as investors cheered a 10% hike in the dividend on a 10.6% increase in earnings per share last year.

What does the company say? Chief executive Dean Finch described himself as ‘very pleased’ with 2017 performance but has not slept on his laurels, signing off on two purchases in Spain and North America at the end of 2017 as the business continued its long-term target of global expansion

What’s the outlook? At the beginning of the year National Express was the second highest-rated stock in the FTSE 350 with eight analysts rating it a unanimous ‘buy’. That consensus has broken down as the stock has surged, and the current average target of 418p offers minimal potential upside.

More about this:

Look up the shares

  • Blancco Technology Group PLC (BLTGB.L)
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  • esure Group PLC (ESUR.L)
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  • National Express Group PLC (NEX.L)
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  • WYG PLC (WYGR.L)
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Look up the fund managers

  • Alex Wright
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  • Clive Beagles
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  • James Lowen
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  • Mark Costar
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  • Mark Hall
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  • Vishal Bhatia
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