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Capita CEO Parker buys the dip
Andy Parker, the chief executive of Capita (CPI), has indulged in a bit of festive bargain hunting with a £95,100 purchase of the company’s shares.
An outsourcer of administration and human resources services, Capita’s share price has more than halved to 489p year-to-date because of poor trading in its information technology services division.
Parker’s investment came on the same day as Neil Woodford’s CF Woodford Equity Income (GB00BLRZQ513) fund spent almost £10m upping its stake in the business to more than 10% through the purchase of 2m shares at around 465p.
A couple of days earlier, Capita finance director Nick Greatorex bought around £10,000 worth of shares in the company.
Parker also bought £98,549 worth of Capita shares in early November.
Investors and analysts have mixed views on the market reaction to two profit warnings from Capita since September and the subsequent decision to sell most of its Asset Services division to reduce debt.
As well as Woodford, Invesco Perpetual’s star UK stock picker Mark Barnett has been buying more shares. Barnett said in November that Capita’s share price had fallen more than its reduced earnings guidance should warrant and that the business ‘has a fantastic core base of earnings’.
Some analysts claim Capita may need to raise new equity from shareholders to repair its balance sheet.
The stock is a steal if Barnett’s claim on Capita’s ‘core earnings power’ proves correct. (WC)