CTM founder buys more shares amidst short sell attack

Written on the 12 November 2018 by Matt Ogg

CTM founder buys more shares amidst short sell attack

After losing more than $120 million from a hedge fund "ambush" of his company, Corporate Travel Management ('CTM', ASX: CTD) CEO Jamie Pherous (pictured) is reinvesting in the business he founded.

After the group released an Ernst & Young-backed defence of its financial health, on Friday Pherous acquired 115,000 shares for a value of more than $2.4 million which now takes his total holdings close to $450 million.

At the time of writing Friday's purchase had made him around $83,000.

Two days after CTM's crisis-mode Halloween AGM where an explanation of North American operations was a dominant theme, US-based independent non-executive director Admiral Robert J Natter acquired 12,000 shares for a value of $269,884.

Admiral Natter is yet to make a profit on that transaction, but his total holdings are now worth around $2.58 million.

Today, Corporate Travel Management announced that Bennelong Australian Equity Partners had become a substantial shareholder in the company with more than 5.7 million securities, giving it a voting power of close to 5.3 per cent.

Bennelong's shareholdings represent RBC, RBC Lux, NAS, Citi and BNP.

Despite the negative press that has surrounded the company following its attack from VGI Partners, Morgan Stanley believes CTM's prospects are strong and has set a price target of $27.

In a research brief after the EY review of CTM, Morgan Stanley noted several points including consistency in working capital with total transaction value (TTV), emphasising "the latest investor concerns do not accurately reflect payments & receipts".

Morgan Stanley noted cash generation would be a key driver for the company in FY19, and also pointed to CTM's clarification that its total staff numbers were 2666 as compared to 2750 as stated on its site.

Meanwhile, Macquarie Wealth Management is confident CTM has responded to all matters raised by VGI but highlights near-term perception has been hit, setting a 12-month price target of $24.50. Nonetheless, its action recommendations remains "neutral", with the belief the stock is fairly valued. 

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Business News Australia

 
Author: Matt Ogg

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