BusinessCompany NewsOn the money with Gavin Hinks

On the money with Gavin Hinks

If there’s one thing in short supply at the moment it is optimism

Gavin Hinks, editor of AccountancyAge

Can’t find it in the City, can’t find it in government. It’s about as rare as
a bank loan right now.

So what happened with Paul Jackson, chief executive of Vantis, who has just
ploughed £2m into the company? You have got to admire the sheer audacity of a
move like that. There’s a man with confidence to spare and who certainly doesn’t
feel like the ball will land on red when he’s betting on black.

Perhaps its unfair to compare investing in Vantis shares to roulette. After
all, Jackson must think things are on the up and certainly his £2m in Vantis
shares is likely to produce a greater return than my savings account with
LloydsTSB.

And this is in an environment where the big firms are expecting a bit of a
slowdown in their growth. Plenty of other staff followed suit, investing what
they had earned in their dividend back into Vantis shares.
Seeing Jackson take such a stake makes me think I should empty the piggybank and
buy in alongside him, conflicts aside.

But seeing a senior man invest is not always a good sign.

I remember when Marconi hit the skids and chief executive John Mayo, a former
FD, and Steve Hare, the then FD, piled up Marconi shares as they plummeted. The
share price didn’t recover any time soon despite their open declaration of
support.

Vantis, of course, is not in anything like that position. Things are going
well, despite conditions. It’s worth bearing in mind that Vantis’ share price
has been in decline over the past couple of years despite reasonable results, so
Jackson must feel there’s tons of unrealised value in the shares. The trick now
is to get a return on all that optimism. And that’s easier said than done.

Gavin Hinks is the editor of Accountancy Age

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