5 shares pros are buying and selling
A roundup of trades by professional investors, including Neil Woodford. This time we look at Synairgen, Ashmore, Macfarlane, Wilmington and Acal.
A roundup of shares by professional
Neil Woodford, the best UK investor of his generation, has taken a big chunk of biotech minnow Synairgen (SYNG) a month after it licensed an asthma drug for a fee worth up to $225 million (£131 million).
Citywire A-rated Woodford went from below a reportable holding in the business to owning 19%, or 17.5 million shares worth £9.1 million at a share price of 52p.
The manager - who has offered the best long-term risk-adjusted return of any UK investor - left Invesco Perpetual, his employer of more than 25 years, earlier this year to launch his own business.
Shares in Synairgen briefly spiked more than 40% in June following the announcement of the deal with AstraZeneca, before deflating as the company placed 12.2 million shares to fund development.
AstraZeenca will pay the company an up-front fee of $7.3 million with the remainder subject to targets, in addition to royalties. Broker FinnCap has a 108p target price on the business.
Jerome Booth has reduced his holding in Ashmore (ASHM), the investment firm he helped establish.
Booth has sold 6.2 million shares in Ashmore – worth approximately £23 million – to take his stake down to 42.2 million shares, equivalent to 6% of the company.
Booth retired from Ashmore, where he had been head of research, last year. He was involved in the group’s creation in 1999 through a management buyout from ANZ Bank.
Booth then formed a new venture called New Sparta through which he invests in other enterprises, including Icon Film Distribution, which owns titles such as La Vie en Rose and Drive in its portfolio.
Ashmore itself is an asset manager focused on emerging markets. Analysts at Citi recently warned that there was ‘room for disappointment’ in its share price if it suffered adverse currency movements or reported weaker margins. They noted that it was also ‘one of the most shorted stocks in the sector’.
Citi’s target price for the stock is 360p, the level at which they are currently trading.
Williams upped his holding in the company from 6.6 million shares to 7.1 million or 6.2% worth £2.8 million at a share price of 39p, down from a 12-year high of 49p in April this year.
The shares, which currently yield 4.5%, are held in his £266 million small-cap dividend-focused Diverse Income Trust (DIVI). Charles Stanley rates Macfarlane an add with a price target of 55p.
Despite some concerns about a persistent long-term pension deficit the business has managed to expand in recent years while consistently either maintaining or increasing its dividend.
In an update in May the company reported a marginal improvement in sales but warned that this was at the cost of some of its margin. It added that it expected volumes to improve in the second half, however.
Whitley increased his stake in the business from 10.1 million shares to 10.3 million, or 12%, worth around £20.4 million.
The shares are held in his £213 million Aberdeen UK Smaller Companies fund. Broker Peel Hunt cut its target price on Wilmington from 280p to 265p in May while N+1 Singer has a target of 218p.
In a trading update the company reported revenue for the first quarter up 5% on the year before but warned the strength of the pound this year had had a ‘small negative’ impact on overseas earnings.
It also reported its legal division was continuing to face weak market conditions, but said it had taken action to defend margins.
Through the Aberdeen UK Smaller Companies fund that his team manages, Whitley purchased another 4.5 million shares in Acal, worth around £10 million. His fund now owns 8.5 million Acal shares, equivalent to 14% of the company.
Last month Acal bought Noratel, a designer and manufacturer of electromagnetic products that is headquartered in Norway. Acal financed the deal in part through a £55 million rights issue, but advised that the acquisition was ‘expected to be immediately significantly accretive to underlying earnings’ – even excluding any benefits from cost savings.
Acal itself has been surging recently, with revenue up by 17% in the year to 31 March 2014 and operating profit jumping by 29%.
The £224 million Aberdeen UK Smaller Companies fund has returned an annualised 21% over the past five years, just ahead of the 20% recorded by its benchmark small-cap index through the period.