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A CRH insider has snapped up shares worth $2.5m (£1.9m) after the FTSE 100 building materials company posted a jump in profits and pre-tax profits in its full-year results.
Non-executive director Richard Fearon bought 10,000 shares at $83.65 per share on the New York Stock Exchange on March 1, the day after the company published calendar year 2023 results. He bought another 20,000 shares at $81.51 the following Monday.
CRH reported a 22 per cent jump in earnings per share in its results, with its well-covered dividend rising by 5 per cent. Revenue rose 7 percent to $34.9 billion, supported by government infrastructure contracts.
The share price fluctuated on results day as the numbers did not quite hit analysts' expectations, but shares remained 65 per cent above the level at which they traded a year ago, when the company first considered moving its primary listing to the US. The move took place in September, and shares have accelerated further in New York and London since then.
Despite this, some still feel that both exchanges are undervaluing the stock. Analysts at Jefferies increased their 2024 cash earnings estimates on the back of full-year numbers, judging CRH's 2024 outlook as “conservative.”
Jefferies said it expects “further upside from synergies” from the company's $2.1 billion purchase of cement and ready-mix concrete assets in the Texas market from Martin Marietta Materials. She now has a price target of $100 per share, which would generate a 21.6 percent return on Fearon's purchase if achieved.
“We delved into CRH's,” Jefferies added [American materials business]examining site location, regional focus, and potential for integration, concludes [those operations] Its importance continues to be underestimated both in terms of organic growth potential and in terms of how this can be complemented by further consolidation.
AO manager supports stock rally
AO World's stock price has more than doubled since hitting an all-time low last summer. The electrical retailer has made a “strategic pivot to profit and cash” and Mike Ashley's Frasers has increased its stake in the company to 25 per cent.
The shares now look fairly well-valued, given that they currently sit above the analyst consensus price target of 90p. They are trading hands at 19 times forward earnings, a pricey rating when compared to the FTSE All-Share Retailers Index, which trades at 12 times.
However, non-executive director Chris Hopkinson is confident the stock can continue to grow. He bought shares worth £592,000 on 6 March, as trustee and beneficiary of Hopkinson Consultants' pension scheme.
AO World raised its 2023 annual pre-tax profit guidance to a range of £28m to £33m in November, after turning to a pre-tax profit of £13.2m for the six months to September 30 on the back of a shake-up of weaker revenue streams. , reduce costs, and introduce fees on all deliveries. Gross margin rose 400 basis points to 23.5 percent.
The top line performance was less pretty. Revenue fell 12 percent in the half, indicating market share losses, and the company expects it to fall by about a tenth over the full year. The combination of weak demand and shrinking sales channels is hurting business.
The mobile sector in particular has suffered, but that could be helped by AO World's acquisition last month of the intellectual property rights to the websites of mobile retailer A1 Comms, which it bought for £2.2m after the latter fell into administration. A1 Comms recorded annual revenues of £152m in its latest set of results.
