Good morning!

Quiet today, as usual on a Friday, so I'll comment on a couple of news items from yesterday too, that I missed.


Lakehouse (LON:LAKE)

Share price: 40p (up 13.5% today)
No. shares: 157.5m
Market cap: £63.0m

(at the time of writing, I hold a long position in this share)

Director buying - 4 Directors of Lakehouse conducted apparently orchestrated (as same quantity & price) buying of shares yesterday, at 35p. A total of £100k, or £25k each.

Personally, I'm not a fan of orchestrated Director buying, as it looks bad to my mind - with the main motivation presumably being to send a PR signal to the market. Anyway, it doesn't really matter what I think, because it's what works that matters, and today's announcement has certainly triggered a significant bounce in the share price after heavy recent falls. up 13.5% today, at the time of writing.

I reported on the company's shock profit warning in Monday's SCVR, here. At first my view was fairly scathing, as indeed was the market, crushing the shares by 54% at the time. However, as I updated Monday's article in the afternoon, to reflect a Peel Hunt note which suggested that the market reaction was overdone, and that it could be a buying opportunity. You might quip "well they would say that, wouldn't they!", since this was the broker that floated Lakehouse in the first place, and now has egg on its face, and probably some very unhappy clients.

Having said that, personally I really rate PH research - it's usually very good indeed, so worth sitting up & taking notice of.

Hence I did pick up a medium-sized position in Lakehouse earlier this week, and wonder if the Director buys announced today might support the share? It has done in the short term, but we'll have to wait and see if the sellers are done yet? I've been looking out for TR1 form announcements, to see what the major shareholders are doing (i.e. buying or selling), but so far there haven't been any. Therefore we can only really gauge market sentiment from the share price.

If PH are anywhere near right, that the company will do 9.9p EPS this year, then the shares probably won't stick around on a PER of 4 for very long. Personally I think there's scope for this share to rise to say 60-70p…

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