Change of wardrobe
With the winter season passing, clothing retailers are working hard at getting their share of what’s left in customers’ pockets by pushing through the last of their winter range before stocking up for summer.
Directors of retailer TFG aren’t following their own advice to customers, though. They have been selling their shares, not buying.
The leader of the pack has been TFG chairman Michael Lewis, son of Stanley Lewis, former chairman and controlling shareholder of Foschini into the late 1980s. Last week Michael sold off about 16% of his shareholding, through Colmar Investment Holdings.
Lewis’s disposal of 1.5m shares for a handsome R233.2m seems to go against the “buy” recommendation of some analysts.
Like another nonexecutive director, Ronnie Stein, who sold R75m worth of TFG shares last week, Lewis says that the sale is for “portfolio realignment”.
The stock has not disappointed investors who braved the chill in the clothing retail sector, where there was increased competition from foreign fashion brands in an already crowded local market.
TFG has been on a recovery path. Since January the stock has jumped 40% to R150. Truworths is up only 5.14% in the period. The share price of Woolworths is down 12.5%.
Lewis and Stein are not the only directors at TFG who have sold off shares recently. CEO Doug Murray and Martin Mendelsohn have also sold TFG stock that was previously granted as part of the retailer’s performance-based incentives.
While directors in the shopping malls are selling off, those on the construction sites seem to be more worried about protecting their investments.
In 2014, some directors of Consolidated Infrastructure Group (CIG) subsidiary Consolidated Power sought to prepare for volatility in the market.
David van Zyl and Leon Heymans, through their associate Chantilly Trading 52, entered into a zero-cost collar hedge over 200,000 shares. The trade had a put strike price of R28.56 and a call strike price of R36.04, due for settlement on July 29.
“As the share price of the Consolidated Infrastructure shares at July 29 2016 was lower than the put strike price of R28.56, the Chantilly collar was automatically settled off-market by the retention” of the stock by the relevant counterparty, says CIG in a statement.
The unnamed institution had held the shares as collateral in a loan arrangement.
The purpose of the hedge, according to DC Moore, CIG’s chief investment officer, was diversification and not linked to any assessment of CIG’s prospects. “As you can see, in the two years since then the group has grown considerably and there have been no new collars taken out by either David or Leon,” he says.
Since the hedge was entered into, the share has held steady, rising only 1.12% to the current R25.88.
Elsewhere on the director’s trading floor, Jannie Mouton, the founder and chairman of PSG Group, purchased R43m worth of stock, together with his sons Jan and Piet.
The chair of newly listed small cap equity vehicle EPE Capital Partners, Yvonne Stillhart, made the first director purchase of 610,000 shares at R10 each, which was the initial public offer price of the listing last week.