Mark Leland's  Instablog

Electronics For Imaging Inc (EFI) is a US based company that makes hardware and software systems for commercial and enterprise digital printing and print management. EFI is world leader in customer-focused digital printing innovation and has won multiple awards for its efforts including the “Editors Choice Award” from PRINT.IT magazine (UK) and three European Digital Press Association Awards for 2010. Its share price is testament to this and has increased steadily from around $9US since the beginning of 2009 to $17.42 on 27^th July 2011, after taking a hit during the Great Financial Crisis of 07/08.

Most recently EFI has had stellar results, reporting on 21^st July they saw second quarter revenues increase 19% to over $141 million US and net income almost triple to $11.3 million. With $0.12 earnings per share this was EFI’s fifth consecutive earnings surprise. The main driver of these results was growth in the software applications business. Zacks Investment Research has ranked this stock as a #1 strong buy and from 1988 through to the present the Zacks #1 rank stocks have a fully documented average gain of 28% per year.

Interestingly though we have seen the president of the company Fred Rozenzweig dumping his holdings of stock in the company over the past two months. Decreasing 99.85% from 155, 758 shares held on 31 May to 233 shares currently held. His most recent trade was on 25^thJuly where he sold 37, 200 shares at $18.11 which brought him to his current level of 233 shares held.

Mr Bob Johnston, Managing Director of Australand Property Group(ALZ), has increased his holding this week by 76,000 shares (holds 0.018% of the company). His investment was just over £132k and is a 258% change in his holding which is why I find this trade noteworthy. The share price has been gently easing off from 317 cps in early 2011 to the current level around 265 cps. The share chart looks like a very large slowly rising channel over the past two and a half years and the price is near the support. He recently gave a shareholder presentation for the half year along with other colleagues and the targeted distribution to shareholders was maintained in the outlook presented. The director’s financial commitment along with the positive glow the presentation gave may be suggesting the director saw a reason to increase his holding.

Again this week we see executive chairman, Mr Timothy Goyder, ofChalice Gold Mines Ltd (CHN) buying to increase his holding again to 28.42mio shares by acquiring 666,666 shares at 32 cps for A$213.3k. (See last week’s comment). As before no news but since early March with option exercise and market buys he has invested about £590k.

Robert Millner, non-exec. chairman of BKI Investment Company Ltd (BKI), has purchased 250k of shares taking his holding to almost 7.05 million (1.667%) and this trade was made almost as soon as the hare passed the traps upon the release of the preliminary full year report on the 18^th July and the window opening.  The company also gave a presentation to shareholders in which they portrayed their conservative and diligent approach to investment. The company’s stated approach to investment may be mirrored by Mr Millner’s own personal approach and this may be revealing his increased belief in the company’s prospects.

Turning to Turkey, Mehmet Kutman, chairman, and 4 of his management team have, en masse, invested approx. £680k in Global Yatirim Holding A.S. (GLYHO). The share price is threatening recent highs this year at about 1.40 TL. It is not easy to discover the reason for trades such as these but when I have seen a group of directors/officers trade I am not surprised to see the share price lurch in that direction. There has been a 22% stake in Global Liman Isletmeleri A.S. disposed of to Savina Holding for USD77.4 mio which is one news item that may have a bearing on these trades but any reason for these trades being effected is difficult to discover due to the language barrier and lack of news outlets. Mr Kutman’s holding increased by 750k shares to just over 53mio (23.55%), the officers investments were maiden investments.

Sonova Holdings AG is a Swiss based company, which builds hearing aids and other hearing healthcare solutions. The company has manufacturing base in Switzerland, Vietnam & China. The company took a big hit recently as its share price fell off a cliff.  With prices trading at CHF115 on the 15^th March the company announced its sales and earnings outlook for 2010/11. Despite a sales increase, the company announced that the launch of its new Phonak hearing range had been delayed in the US due to an unclear regulatory situation. They were also affected by a recall of their Advanced Bionics, which is estimated at costing them CHF 65 million. The next day the price had dropped to CHF 89.15, a decrease of 25%.

Unfortunately due to the reporting practices of Swiss companies we cannot veify who carried out a transaction, but it certainly saw one member of the exec team get burned. They bought close to €50k shares at CHF122 three days prior to the announcement. However they were in the minority, as in the fortnight before the announcement, a total of €11.09 million was sold by directors. This was made of many selling shares straight after exercising options, but also included 5 straight sells. One trade that did come to light was that of Chairman Andy Rihs, who sold €28.9 million on the 8^th March. But with accusations of insider trading, the director was forced to overturn the trade and also demote himself. Despite all concerned denying the allegations; Chief Exec, Valentin Chapero, & Chief Financial Officer, Oliver Walker, resigned from the company.

Despite the controversy the directors have not been put off trading, and in the last two months have been back in the market buying at between CHF78 – 89 per share.  The most recent of which saw an executive member add €81k as the price continued to head southwards.

Over the years the Chairman of Durr Ag has been a long term buyer, as is typical with European companies owned by families. Every now and again the chairman switches allegiance and dumps stock. Last week was such an occasion. The director sold 69k shares at €29.3 per share, taking home just over €2 million. The sale is fairly insignificant when compared to Heinz Durr’s family holdings, which currently owns 30% of the company, valuing the holding at around €162 million.  The director has been quiet so far this year, and the sale is only his third trade. His previous trades were buying €230k in January and then again in March. The sale is also the first for the director in over 12 months, when he sold €2 million in April ‘10.

The sale came just as the company’s price has returned to mid-2008 levels having suffered through the financial crisis where it dropped below €10 a share. Durr Ag is a world leader in car paint, equipping 50% of global assembly plants. The company’s future is therefore closely tied with the German car market, and has seen its recovery closely mirror that of fellow German industrialists BMW Ag, and others.