IN keeping with a five-year tradition, Monadelphous managing director Robert Velletri has exercised options at a hefty discount to the company's trading price.
IN keeping with a five-year tradition, Monadelphous managing director Robert Velletri has exercised options at a hefty discount to the company's trading price.
Last month, Mr Velletri spent $585,000 exercising 300,000 options at a price of $1.95 each. The exercise compares to the company's closing price that day of $6.39.
At the end of the transaction, Mr Velletri was left with 500,000 options and 2 million shares.
The "in the money" exercise is a tradition Mr Velletri has kept up since 2004, where the managing director routinely exercises options in February and always at a significant discount to the company's trading price.
In 2008 and 2007, the managing director exercised options at $1.95 each when the company was trading at around $12 and $9.45 respectively.
In 2006, he exercised options at 42.25 cents each when Monadelphous shares were at $5.43 while in the previous two years he acquired shares at an 82 per cent and 63 per cent discount to the share price.
While Mr Velletri has been receiving a good deal, shareholders have not missed out either with the company's share price mostly outperforming the benchmark S&P/ASX 200 index before a one-to-four share split in June 2006.
The split, undertaken to increase liquidity, lowered Monadelphous' share price from $11.25 to $2.81.
Up until around May 2008, the company's share price has been playing catch up with the S&P/ASX 200 index and since then has outperformed the index.
Analysts at Hartleys believe Monadelphous' share price is expensive but said it is "reasonably justified" by the company's balance sheet and its ability to maintain a high dividend payout.
Monadelphous declared a 72 cents per share dividend for the 2008 financial year and Hartleys estimated the company to pay a 76 cents per share dividend this financial year.
Despite the company's high share price, Hartleys upgraded its recommendation to neutral from reduce and has set a 12-month share price target of $7.74.
The brokerage estimates Monadelphous to achieve a normalised net profit after tax of $72.2 million for 2009 financial year.
INDEPENDENCE GROUP
Independence Group executive director Kelly Ross has sold $771,757 worth of shares, with funds from the sale to go to the tax man after the conversion of some options.
In a notice to the stock exchange, Ms Ross sold 350,000 Independence shares at around $2.20 each.
Ms Ross said the sale was due to a tax payment on some options she converted at $8.50 each last year, when shares were trading between a range of around $1.20 and $9.30.
CAPE LAMBERT IRON ORE
Cape Lambert Iron Ore executive chairman Tony Sage has spent $390,000 topping up his stake in the company.
Mr Sage bought 1.63 million shares on-market, boosting his interest in the company to nearly 27 million shares valued at $6.5 million.
But, the chairman's holding in Cape Lambert pales in comparison to the total amount of shares on issue, which is currently at 523.8 million.
