The market's mobile mavericks are out in force, providing a welcome shot in the arm for down in the dumps Volex (VLX), up 4.5% to 105.8p after a string of director share purchases.
The London-based connectivity manufacturer has been largely shunned by investors for six months, having shocked with a profit warning in September that saw the shares collapse from 265p to just 89p. But the worm usually turns, eventually, and Samsung's (005930:KS) much-anticipated launch of its spanking new Galaxy S4 smartphone has investors assuming hefty sales will equate to bolstered demand for Volex's connectivity and power-up kit.
According to the FT, the Galaxy S4 raises the bar significantly in the bitter smartphone wars, and the launch is certainly one of the hot topics of chat on Twitter.
Volex manufactures fibre optic cables and connectivity components for all sorts of top brand electronics, from smartphones and tablets, to PCs, printers, TVs, even fridges and healthcare equipment. Its plan is to stay at the cutting edge of new technology trends, designing low-power connectivity kit in an increasingly wired world where electronic devices increasingly talk to each other.
But this is a tricky spending cycle to predict and Volex has come unstuck in the past thanks to delayed or pulled product launches from device manufacturers hitting the UK company's orders. The flip side to this is the rapid roll-out of new smartphones including the previously-flagged Galaxy S4, Blackberry's (BB:TO) Z10 last hope and new Windows 8-running Nokia (NOK1V:HE) Lumia handsets. Apple (AAPL:NDQ) fans are poised ahead of a mooted, but as yet unconfirmed, new iPhone mini, perhaps set for launch later this year.
Volex chief executive officer Ray Walsh has responded to its latest squeeze by kick-starting a cost cutting programme designed to bolster margins, such as improving labour efficiency and productivity, and cutting excess scrap.
How quickly he can push such measures through remains to be seen, yet Walsh seems confident judging by his £32,000 share buy earlier this week, making it £160,000 of shares picked-up by board members since last month's trading update (12 February).
There is seldom a better sign of improving prospects at a company than its own management backing the story with hard cash.
