Gambling Shares: Follow The Insiders
One of the oldest systems when picking shares is to follow the insiders – the directors of the company. One would hope they must know more about the business they run than all the analysts and stock pickers. So if they buy or sell then it is probably wise to follow them.
Here are some of the deals that have been done recently in gambling companies that are listed on the London Stock Exchange.
Gambling Shares: Director Dealings
William Hill CEO Ralph Topping has realised £2.1 million in two sales. Is that a reflection on his view that the share price has reached its optimum value? Or maybe he just wanted the money to buy something he has always wanted, like Inverness.
Investors in Bwin.Party have so far been disappointed since the merger with PartyGaming. Are they turning the corner now especially as its Chief Executive Norbert Tueflberger has acquired nearly £300,000 of his own company shares? Is he expecting a huge uplift from regulation of e-gaming in the USA or is the consolidation between Bwin and Party finally going to pay off?
For some time analysts have been saying that Paddy Power has reached its full value and Patrick Kennedy seems to agree selling shares to the value of EUR 5 million at EUR68. Paddy Power’s shares are currently trading at EUR 60, so it was astute timing by him back in April.
Then we have Betfair. Chairman Gerald Corbett bought £168,000 worth of shares at 840p in late June. Betfair’s share are now 987p, giving a paper profit of almost £30,000. He probably wishes he had bought more.
So the directors have generally called it correctly over a very short period of time since their transactions.
Is William Hill a short? It has certainly fallen back a bit from its five-year high set at the start of August 2013 but analysts do not think it is time to sell.
But there are some difficulties on the horizon for the UK gambling industry. The Liberals want restrictions on the location of betting shops and the new Point of Consumption Tax are but two.