Boardroom Talk: Insiders cash in by selling shares to ignorant believers in M&R’s turnaround story

During my recent research into restructuring the BizNews share portfolio, I spent a lot of time looking at Murray & Roberts, the one-time construction giant that has transformed itself into a global engineering group.

My interest was first piqued when it popped up as one of the Top Five holdings in John Biccard's Ninety One Value Fund. Biccard has a long history of discovering undervalued stocks. It grew as I saw the share price halve from R12 to under R6 in just over a month. From all the official info available to investors, this collapse in the price seemed senseless.

Results for the year to end June were below the market's expectations, but M&R still posted delivered strong revenue growth (R30bn from R21bn) and posted a hefty profit (EBIT of R705m v R540m). Details in the annual report reflected management's confidence in a five year turnaround plan, delayed but on track.

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