Directors dealings: Aviva chairman steps in and buys

Aviva chairman Sir Adrian Montague picked up shares in the life insurer which had been beaten down in 2016 on the back of worries about the impact that low interest rates will have on its profitability and the possible fall-out from Brexit.

Montague bought 7,000 shares at 407p apiece on 4 August, the company said in a statement.

On the same day, the insurer reported a 13% rise in half-year earnings and even increased its dividend payout by a tenth.

That led the Financial Times´s Lex column to muse aloud about the recent boast from Aviva chief Mark Wilson that his business was built for low interest rates.

Changing hands at 8.0 times earnings, the stock was trading at a discount to the average price-to-earnings multiple for its peers of 9.0.

"If Mr. Wilson can keep backing up his boast that gap will keep closing," Lex said.

Indeed, for some Wilson had gone out on a limb in the previous year with his acquistion of a rival insurer for £5.6bn.

Analysts at Exane BNP Paribas on the other hand were somewhat less sanguine, telling clients in a research report published on 5 August. "Aviva reported a largely in-line and relatively clean set of H1 2016 results, which we believe is an important step in management’s plan to transform the business into being a stable and predictable dividend payer.

"Where we continue to have more concern is around the ability to deliver longer term growth in line with management mid-single digit EPS growth ambitions. While having limited valuation downside, we remain below consensus in terms of earnings and dividend expectations."

Top Director Buys

Aviva (AV.)
Director name: Montague,Adrian
Amount purchased: 7,000 @ 406.85p
Value: £28,479.50

Invesco Income Growth Trust (IVI)
Director name: Dampier,Mark
Amount purchased: 8,752 @ 284.12p
Value: £24,866.62

Zegona Communications (ZEG)
Director name: Kalika,Howard
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Value: £5,570.00

Rps Group (RPS)
Director name: Hearne,Alan
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Value: £125.79

Rps Group (RPS)
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Amount purchased: 67 @ 187.75p
Value: £125.79

Rps Group (RPS)
Director name: Young,Gary
Amount purchased: 67 @ 187.75p
Value: £125.79

Top Director Sells

Clipper Logistics (CLG)
Director name: Parkin ,Steve
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Value: £2,291,662.50