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Macquarie directors buy more shares

The Australian Financial Review has reported that three non-executive directors of Macquarie Group (ASX: MQG) have put their own money into the business in the past two weeks.

As covered in this excellent article a new report by Macquarie Equities found that companies with directors that own shares generally outperform others by 8%. Macquarie has certainly outperformed in 2013, with its shares now up more than 50% in the past year. Director share purchases indicate confidence there is more growth to come.

The group has benefited from an improved outlook for mergers and acquisitions, initial public offerings and other profitable corporate activities it partakes in. Subject to shareholder approval on 12 December, Macquarie intends to distribute its holding in Sydney Airport (ASX: SYD) in exchange for holdings in its own shares. This should allow it to grow earnings per share and pursue more lucrative growth opportunities.

The group delivered an impressive first-half of financial-year 2014, with profit up 39% on the prior corresponding period to $501 million. To further cheer investors the interim dividend shot up 33%, with the second half of 2014 expected to be even stronger.

Foolish takeaway

This former high flyer has certainly picked itself off the ground, with many experts expecting the share price to break through $60 soon enough. The group’s innovative reputation and ability to change with market conditions mean investors should not be surprised if it continues on an upward trajectory.

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Motley Fool contributor Tom Richardson owns shares in Macquarie.  

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