Primary Recommendation

Bovis - New CEO acquires £3.2m shareholding in housebuilder

August 2017

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

One of the classic buy signals in investing is when directors purchase their own company’s shares so when incoming CEO Greg Fitzgerald spent £3.22m on acquiring almost 325,000 shares at prices between 920-925p in house builder, Bovis, that really caught our attention. With its attractive Southern-weighted landbank Bovis ought to be amongst the high flyers but an anaemic return on capital employed (ROCE) and missed completion targets due to operational issues (some customers moved in only to find missing appliances, lack of turf in the garden and unpainted lounges) have dented progress. Some have put this down to an aggressive target driven culture but whatever the reason Bovis clearly needed highly experienced management and CEO Fitzgera ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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