Directors Who Care

Published in Investing on 13 April 2012

Directors who put small shareholders first? Yes, and there's been discussion of large cap value and economic issues too, on our discussion boards.

With a long Easter weekend last week, things were relatively quite on the boards and we didn't bring you an update. So this week, we're taking a look back over the past fortnight.

Directors who care

With there being such furore over company directors paying themselves vast sums while shareholders suffer from falling share prices, it's nice to hear a refreshing tale of a company that takes the opposite approach and puts its smaller shareholders first.

At Paulypilot's Pub - Share Ideas, burgdorf told us of one...

"All Leisure (ALLG) is a small, niche cruise operator [...]

At the AGM today the chairman stated that 'as a result of the tragic sinking of Costa Concordia and other related issues in the cruise market, sales have slowed down considerably...' [...] However, he stated that 'the Board has unanimously agreed to waive the proposed dividend in relation to shareholdings held by the Board (74.01% of the issued share capital), but have voted to pay a final dividend of 1.31p per share payable on 2 May 2012 to all other shareholders'".

That's really good to hear, and it's good to praise honourable company managers when we hear of them. Do have a read of the thread.

Large cap value

With economic confidence starting to creep up again, and many share prices still in the dumps, surely there are some bargains to be had amongst the FTSE-100, aren't there? Well, Carcosa thinks so, and on the Value Shares board has done some screening for us...

"Large cap mechanical value trawl of FTSE 100 (original idea of TMFPyad a long time ago). Basically the idea is that shares that show up in two or all three tables (figures are highlighted in bold type) maybe worthy of further examination, such as the recently discussed Vedanta. PE and Yield are historic. A few caveats though; this is a 'mechanical' value trawl meaning that no effort has been made in verifying the data.

No one share appears in all three tables but a few make appearances in 2 out of three tables.

It's a starting point."

Thanks for that, it's a great starting point. If you want to find bargains, check out those tables and use them to kick off your own research.

The US economy

Over at Bert's Investor Sanctuary, the gaffer, BertEEE, is pretty bullish about the long term prospects for the US economy, which, despite the growth of newcomers like China, is still central to world trade...

"So there are significant reasons to think that the US economy will continue to expand. At the same time the Fed want to ensure that unemployment keeps falling and that the US doesn't experience structural employment issues so appears intent on keeping emergency levels of interest rates for some time yet. The fiscal consolidation that has to occur will weigh on growth but growth should remain in the 2-3% region for a while yet. Of course as the economy becomes ever more self sustaining so higher growth rates are possible.

I would firmly refute the idea that growth in the US is somehow transitory or that it's impossible to see where growth is going to come from."

He provides plenty of details, and a lively thread developed, so do feel free to join in. And if you have room for more, BertEEE has offered his thoughts on Europe too.

As bad as the Great Depression?

It's a controversial suggestion, but has the recent economic downturn been as bad as the Great Depression? There's been a lengthy discussion on just that subject, on the Paulypilot's Pub - Macro Topics board, started by mathsman, who says...

"There was a previous thread in the middle of 2009 with the subject title that 'This recession matches the great depression'.

One person stated that this was the most ridiculously titled thread the Fool has seen for a long time. It doesn't look so ridiculous now.

As Kevin Daly from Goldman Sachs noted recently, the official story that we have permanently lost at least 7-8% of our national output in this crisis implies that the past few years have done more lasting damage to our economic potential than either World War II or the Great Depression.

Now we have passed a new milestone. By this stage of the 1930s Great Depression, the UK economy had clawed back the ground lost during the slump. This time GDP is still some 4% below the pre-crisis peak."

It's a lively interchange, as you might expect, so do feel free to add your thoughts.

The effect of the budget

OK, it's been a few weeks ago now, but that didn't stop uryjm, on Living Below Your Means, from offering us a top tip on how to gauge the budget's effect on your finances -- but you'll really have to read it yourself.

Previous roundup: A High-Yield Purchase

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Benatar 13 Apr 2012 , 5:55pm

Of course it always helps this scenario when the executive directors are also significant shareholders.

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