Taking profits in buoyant market
Reunert CEO Pretorius sells stock worth R20,5m
THE STRONG TIDE of selling by directors continues unabated as the strident performance of the JSE tempts them to lock in the profits on their shareholdings. Top of the list this week is Reunert CEO Boel Pretorius, who sold stock worth R20,5m in the electronics and electrical engineering group. Of that, R16,5m related to unwinding a zero cost collar hedge he took out in March last year over a portion of his shareholding.
Perhaps more interesting is that Reunert financial director Dave Rawlinson and executive director Pat Gallagher preferred to extend their own hedge positions for another six months rather than offload the stock now.
At computer services and consulting group EOH Holdings, CE Asher Bobhot sold a quarter of his stake in the group for R18,8m. The stock sold represents 3,6% of the company’s issued share capital.
We’d have liked to get a comment from Bobhot, but EOH’s management team was apparently away at a “sales conference” and we weren’t offered his cellphone number. EOH recently recorded a sterling 26% hike in attributable profits for the half-year to December.
Another two directors who seemed terribly keen to lock in stock gains were Distribution & Warehousing Network (Dawn) chairman Lou Alberts and CEO Derek Tod, who sold stock worth just under R25m between them. Dawn is a manufacturer and distributor of South African and international quality branded hardware, sanitaryware, plumbing, kitchen, engineering and civil products in SA and in selected African countries.
The strong economy, together with record building activity, has ensured that Dawn is doing a roaring trade. Turnover rocketed up 70% to R1,4bn in the six months to December 2006, with profits rising by a similar percentage to R105m. The market has responded by pushing Dawn’s share price to all-time highs.
One company going against the grain of the overall market is private hospital group Network Healthcare (Netcare), which has seen its share price slip nearly 9% since end-January. So far only Ingrid Davis, who heads the pharmacy operations in the hospital group, has shown any concern for the group’s prognosis, selling stock worth R14m over the past two weeks.