Power buying at Fortescue a reflection on those who know

NEVILLE Power, Andrew Forrest's right-hand man at Fortescue Metals Group, has resumed buying shares in the iron ore miner.

By InvestSMART · 9 Jun 2012

By InvestSMART ·
9 Jun 2012

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NEVILLE Power, Andrew Forrest's right-hand man at Fortescue Metals Group, has resumed buying shares in the iron ore miner.

Power is a man who likes buying Fortescue scrip in half-a-million-dollar dollops.

He joined Fortescue early last year, became a director on September 1 and shortly thereafter started buying shares.

On Tuesday he bought his sixth $500,000 lot and the prices he paid were $4.84, $4.56, $4.75, $4.50, $4.27 and now $4.59 a share.

Great confidence, eh? And Andrew Forrest seems well pleased with his recruit.

Yesterday Forrest said that he had needed someone who had a clear understanding of Fortescue's direction and the enormity and potential of its assets, and, most of all, had the importance of the group's culture as his prime responsibility.

"That's a rare and difficult person to find, and we have that in spades with Nev Power," Forrest said, and added that the former Thiess and Smorgon Steel employee also brought a hard operational edge and a tough commercial approach that came from years in hard-money contracting and mining, and in building major businesses.

Power's stake is worth $4 million with the on-market portion of it bought at a $4.58 average price. The stock closed yesterday at $4.59.

The man who is ahead of the game is fellow director Graeme Rowley who let 1 million shares go at $5.57 a share in March.

Speaking of ahead of the game, consider three directors of mining service group Mineral Resources who sold upwards of $75 million of stock in March at $12-plus. The stock closed yesterday at $9.33.

Elsewhere, concrete king Raymond Barro has returned to the Adelaide Brighton market, spending up big. In recent days, his Barro Properties has picked up shares at $2.83 but mainly at $3.01. Barro now holds 29.4 per cent of Adelaide Brighton.

Among other business builders, Kevin Seymour bought 1 million shares at around 59? in Watpac, a construction group.

He bought on Thursday, a couple of days after the company forecast underlying tax-paid earnings of around $15.5 million, placing the stock at about seven times earnings.

Acorn Capital also has been a recent buyer and now holds about 5.5 per cent of the capital.

The reporter owns ABC shares.

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Frequently Asked Questions about this Article…

Who is Nev Power and why is his Fortescue shares buying important for investors?

Nev Power is a director at Fortescue Metals Group who has been buying Fortescue shares in repeated $500,000 lots. Insider buying by a senior director like Power can signal management confidence in the company's outlook; the article notes his purchases and comments from founder Andrew Forrest highlighting Power’s operational experience and cultural fit.

How much did Nev Power pay for Fortescue shares and how big is his stake?

According to the article, Nev Power bought six $500,000 lots at prices of $4.84, $4.56, $4.75, $4.50, $4.27 and $4.59 per share. The on‑market portion of his stake was purchased at an average price of $4.58 and is reported to be worth about $4 million; the stock closed at $4.59 on the day reported.

What did Andrew Forrest say about hiring Nev Power and what does that mean for Fortescue shareholders?

Andrew Forrest said he needed someone who understood Fortescue’s direction, assets and culture, and praised Nev Power for bringing a hard operational edge and tough commercial approach. For shareholders, Forrest’s endorsement suggests board confidence in Power’s ability to support Fortescue’s strategy and preserve the group’s culture.

Did any other Fortescue directors trade shares recently?

Yes. The article notes fellow director Graeme Rowley sold 1 million Fortescue shares in March at $5.57 a share, illustrating mixed director activity at different prices.

What director trading happened at Mineral Resources and how did the stock perform?

Three directors of mining services group Mineral Resources sold more than $75 million of stock in March at prices above $12 per share. The article reports the stock closed at $9.33 on the day referenced.

What recent share purchases and stake size were reported for Adelaide Brighton?

Concrete businessman Raymond Barro, via Barro Properties, returned to buying Adelaide Brighton shares, picking up stock at $2.83 and mainly at $3.01. The article reports Barro now holds 29.4% of Adelaide Brighton.

What buying activity and earnings outlook were reported for Watpac?

Kevin Seymour bought 1 million Watpac shares at a price the article reports as 'around 59?'. The purchase came days after Watpac forecast underlying tax‑paid earnings of about $15.5 million, which the article says places the stock at roughly seven times earnings. The article also notes Acorn Capital has been a recent buyer and holds about 5.5% of the capital.

Does the article disclose any potential conflicts of interest or ownership by the reporter?

Yes. The article includes a brief disclosure that the reporter owns ABC shares, which readers should note when considering the commentary.