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Diary of a Top Stocker: pouncing on battered Weir

I've sunk £1,000 into Weir (WEIR.L), a Citywire Top Stock, after a 20% slide in the valve maker's shares. Have I caught a falling knife?

 

Down but not out

As with my previous purchases of Glaxo, Vodafone, Shell and BP, I’ve allocated £1,000 to Weir. Using Barclays Stockbrokers this has come out at total cost of nearly £1,008, with £12.95 on commission and £4.95 in stamp duty, leaving nearly £990 to buy the Weir shares.

Barclays’ price improver says it has saved me 3p on the trade! I won’t spend it all at once.

Incidentally, I was slightly mocking about  Barclays’ ‘available to invest’ facility last week. This tells me that I can invest up to £14,832 if I want to, even though I will have less than £5,000 once the Weir trade settles. Barclays tells me that this is a facility to help clients pounce on a good buying opportunity if they see one as long as they get cash into their account pronto. Pretty sensible idea really, but not one I will using unless I want to risk the wrath of my boss or the accounts department!

So far I’m 3.85% down on my investments, which is a slight improvement on last week.

What's on my mind

I’m a bit concerned that my portfolio is getting a bit oil and gas heavy. Nevertheless, I will be looking with interest at today’s results from Afren (AFRE.L), shares in which are up 4.4p to 135.5p. Meanwhile the news from Tullow Oil (TLW.L), up 6p to £15.77, continues to be good.

Outside oil and gas, Peel Hunt’s yesterday raising its price target on Galliford Try (GFRD.L), down 2.5p to 625.5p today, puts the house builder back on my radar.

And I’ve still got my eye on Imagination Technologies (IMG.L), the highly valued chip designer, up 2p to 719p today. Thanks to the readers who gently corrected me on its business and its attractions. I'm feeling better about the company having read in M&G Recovery fund's last results that Top Stocks manager Tom Dobell is also a long-term holder of the stock. It's not a top 10 holding like Thomas but it is encouraging to see him take the same view as his peer. 

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8 comments so far. Why not have your say?

Redundant (Old Timer?)

Mar 27, 2012 at 13:25

I always ignore newly appointed Director's first dealings in FSTE companies - it is often a requirement that they take a vested interest in the company by buying £X value of shares.

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MOGO

Mar 27, 2012 at 20:01

Me too. I bought Weir on the fall, I think the fall is overdone, Weir pays a reasonable dividend and has a successful business, its products have good records of reliability, when I was a marine engineer 45 years ago, every ships engine room was stuffed full of Weir pumps of all shapes and sizes and they never gave me a moments concern.

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J Bewey

Mar 28, 2012 at 09:57

I agree Weir is still a quality stock; the price fall more to do with manipulation of supposed bad news so the market makers can make a killing. However with regard to Mogo's comment on the quality of the product he worked with; I used to work with Marconi datacoms equipment, which was really impressive and reliable, but with bad management the result is history. I caught a cold with their shares after following the Finance Directors £250,000 purchase of shares while they were falling. So you pays your money you takes your chance!

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john_r

Mar 28, 2012 at 19:48

Hmmh,

I wonder why 2 directors sold nearly £3m of Weir shares between them yesterday at £1.769 per share.

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J Bewey

Mar 29, 2012 at 11:43

As usual what do the insiders and market makers know that we do not. Sharedealing by directors should only be allowed 24 hours after they have stated their intentions to shareholders only!

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david haining

Mar 30, 2012 at 11:27

Weir is neither a falling knife nor a falling star but a first class company which, for some reason or another, the markets appear not to understand.

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J Bewey

Mar 30, 2012 at 11:52

Agreed. To john r I found out the director's selling was through excersising their share options @ £17.96 a share and then selling some to meet their tax liabilities. So all is well hopefully. Should be a good time to buy from what I see but DYOR.

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Medved

Apr 01, 2012 at 16:13

I think Wier is one of the most manipulated stocks. Almost all the ups and downs are artificial. IMHO

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