Insider: boss buys shares so cheap it’s a joke

A £150,000 purchase of Aston Martin Lagonda Global Holdings Ordinary Shares (LSE:AML) shares has been disclosed by the car maker’s chief executive, not long after its part-owner called the stock market valuation “a joke”.

Adrian Hallmark’s investment took place at a price of 75p, having seen the FTSE 250-listed stock rebound from an all-time low near 60p at the height of tariffs turmoil on 9 April.

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The stock rallied a further 4% after the stake building was revealed to the market, as Hallmark backed up his earlier comments that the group is on track for 2025 self-sufficiency targets in terms of full-year earnings and cash break-even.

The price compares with the 70p a share at which executive chair Lawrence Stroll’s Yew Tree Consortium acquired shares at a 7% premium, part of a wider £125 million fundraising announced at the end of March.

Having pumped in £600 million since 2020, the support took the stake of Stroll and partners to 33% as they continue to provide the additional headroom needed for future investment.

The billionaire said his backing underscored “my conviction in this extraordinary brand” before reportedly telling Bloomberg a stock market valuation of £650 million was a joke.

His optimism over the company’s prospects was backed up a few weeks later by the City’s largely positive response to a first quarter update on 30 April.

The company posted wholesale volumes broadly in line with last year at 950, with the core average selling price up by 10% to £193,000 thanks to the impact of its recently launched range of ultra-luxury high performance models.

Revenue fell 13% to £233.9 million but the bottom-line loss narrowed to £79.6 million.

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The company’s 2025 guidance was unchanged, with Hallmark expecting to deliver positive adjusted earnings for the full year and free cash flow in the second half.

On the evolving tariff situation, Hallmark said that the company had limited its exports to the US whilst leveraging the stock already held by dealers.

The US accounts for an estimated 30% of Aston Martin's wholesale volumes, generating about £350 million in sales from the core portfolio.

JP Morgan Cazenove pointed out that the recent US trade deal, which reduced import tariffs for UK-made cars under a quota system, was generally favourable for luxury UK car manufacturers.

The bank added: “The tariff reduction from 27.5% to 10% for the first 100,000 vehicles annually benefits brands like Aston Martin, Bentley, and Rolls Royce, though it remains higher than the previous 2.5% duty.”

Analysts at Bernstein noted that dealers should have months of tariffs-free inventory to sell in the US due to overproduction by the company in 2024.

They added that turning cash burn to cash generation has been the elusive problem at Aston Martin ever since 2018’s £4.3 billion stock market flotation.

Bernstein said it liked the current strategy and setup, including the prioritisation of the business away from volumes to higher average selling prices. It has a price target of 120p.

The bank added: “While there is still plenty that could go wrong, the equity remains attractive for those with some risk appetite: an impressive new CEO with a sensible plan and massive valuation gap to peers.”

JP Morgan expects that Aston Martin’s adjusted earnings will rise from £310 million in 2025 to £450 million, although it warns visibility for the next two years is limited.

Backing an ex blue-chip

One of the longest-serving directors of RS Group (LSE:RS1) has shown confidence in the former FTSE 100 company’s turnaround potential by spending £28,000 on an increased stake.

Segro chief executive David Sleath, who joined the RS board in June 2019 and serves as its senior independent director, bought the shares last week at a price of 570.5p.

That compares with their low of 487p during the height of the market’s tariffs turmoil on 7 April and this year’s peak of 684p. They had been as high as 1,252p in November 2021.

In annual results published last month, the former Electrocomponents business reported a 15% decline in pre-tax profit to £206 million, but said it had made “significant” underlying strategic and operational progress.

It said the initiatives boosted confidence in its medium-term financial targets, which include growing revenues at twice the market with mid-teen adjusted operating margins.

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The company stocks over 830,000 industrial and specialist products and lists an additional five million relevant for its industrial customers, sourced from over 2,500 suppliers.

It said in the results that market conditions remain challenging, with the Americas and Asia Pacific more resilient than Europe and the Middle East.

The group said: “We are monitoring the evolving global tariff environment which we expect to have limited direct impact on RS but are mindful of the indirect effect that tariffs might have on industrial production and confidence.

“We remain confident that once PMIs (purchasing managers’ indices) recover, structural industry trends will return our markets to growth.”

Bank of America recently upgraded its recommendation to Buy, believing that the end of the destocking cycle can support a return to growth in Automation and that the announced savings programmes will drive margin expansion.

With shares at a 30% discount to their historic multiple, the bank increased its price target to 730p.