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Goertek Inc & Vestas Wind Systems

Goertek Inc has had an incredible year. The company manufactures audio devices for telecommunications providers, and is based in China. The company announced its results for 2010 in May, which included a doubling of its turnover. It also announced a doubling of its dividend, from 0.10Y in 2009 to 0.20Y.  The company also announced it would be setting up a China based subsidiary to engage in trade business. All of which contributed to the company share price reaching its highest point since the turn of the year.

The directors have been quick to take advantage of this, and there have been a recent spate of sales. Beginning on the 14th June, five directors have sold a total of $5.8 million. Apart from the very first trades, the majority of the sales have come at the 25Y mark, which is five times the trading price of the company two years ago. Although substantial amounts, none of the trades made huge dents in the holdings of the directors, who still maintain large stakes. The trades were carried out by mainly executives and senior management, the only major exception was that of Chairman Jiang Bin and his Vice Chairman Jiang Long.

Renewable energy is the focus of many investors these days, with many seeing nuclear, solar, tidal and wind being the future of the energy industry. With rapid expansion in the sector and big players like Google and IBM starting to get involved the hope is that these technologies will take up the slack from pollutant energies like coal and gas. Wind energy is where Google is putting its money; most recently it invested £102 million in Alta Wind Energy Center. The market will also be helped with governments also starting to apply more pressure. In September last year the Scottish governmentannounced it would be raising its renewable energy target for 2020 from 50% to 80%. This is largely because the country has seen a rapid expansion in the wind power sector.

Despite all this Danish company Vesta Wind Systems has seen its market price drop from 2008 highs of around DKK 600 down to DKK130 in recent weeks. This doesn’t seem to have bothered directors who have been buying the stock all the way down. The most recent trade was made by Jens Tommerup (in late May), who is president of the China division. The senior exec bought €53k at DKK 149.69. This is the 17th purchase by insiders since late 2009, and although not one has put substantial amounts behind the company it is surely a sign that they are looking to take advantage of short term prices. The company hasn’t paid a dividend yet but it has encouraging fundamentals, that have shown steady improvement. This would certainly seem to back-up the directors.