Shares of cleaning and catering services business Spotless Group Holdings Ltd (ASX: SPO) soared 15.3% on Wednesday on lower trading volumes than each of the last three sessions. It was the best performing share on the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) for the day.
Spotless Group's shares have come under severe selling pressure in recent weeks, sparked by a major earnings downgrade at the beginning of December. After trading for $2.20 around that time, the shares quickly fell to a low of just 90.5 cents as investors scrambled for the exits, which even led to speculation regarding potential interest from an offshore private equity firm.
Of course, if it were to be taken over, now could be the opportune time. Its shares haven't traded this low before and the weak Australian dollar would make a purchase by a foreign investor even cheaper.
Making things even worse for Spotless Group were reports from The Sydney Morning Herald that the company had lost a three-decade-old catering contract at Brisbane's Suncorp Stadium to a smaller rival recently.
While reports of a potential takeover have likely helped prop up the shares somewhat since then, a notice to the market today noted that one of the company's directors, Martin Sheppard, had acquired 50,000 more shares in the business.
There are numerous reasons why directors may want to sell shares – for example, believing they're overpriced or simply needing to liquidate to pay for a new house (etc) – but there is only one reason why they'd want to buy. Shepperd's recent acquisition may have provided the boost in confidence needed by regular investors to buy as well.
Some of the market's other top performing shares for the day were Beach Energy Ltd (ASX: BPT), Alumina Limited (ASX: AWC), and Drillsearch Energy Limited (ASX: DLS), all of which rose between 10.5% and 13%.