P/E less than 47 Oct 2010 10:16
Motley Fool article snippet;
Directors Are Buying Shares Again
Rok (LSE: ROK.L - news)
Rok (LSE: ROK) shares plunged in August when the building services group revealed it had uncovered "serious failings" in the financial controls in one of its divisions, and suspended -- then subsequently vindicated, only to lose to resignation -- its Chief Financial Officer.
Despite this turmoil, chief exec Garvis Snook felt confident enough to spend £50,000 on 250,000 shares in mid-September, paying 20.25p per share. On Monday he bought another 200,000 shares for 19p, this time being joined by new CFO Sean Cummins, who bought 210,000 shares for 18.75p, and two non-execs who bought just over 100,000 shares between them. The shares rose over 10% on the announcement of these purchases to 20.25p.
Back on 30 September, Rok said it had satisfactorily completed its review of its rogue division, and that it was on track to meet market expectations for the year. These expectations put the shares on a P/E of less than 4, and a yield of 9%, so Rok is a clear bargain if the directors' faith is well-placed.