£5k to invest in UK shares? I’d follow this £800k director buy

first_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. The high-calibre small-cap stock flying under the City’s radar £5k to invest in UK shares? I’d follow this £800k director buy Adventurous investors like you won’t want to miss out on what could be a truly astonishing opportunity…You see, over the past three years, this AIM-listed company has been quietly powering ahead… rewarding its shareholders with generous share price growth thanks to a carefully orchestrated ‘buy and build’ strategy.And with a first-class management team at the helm, a proven, well-executed business model, plus market-leading positions in high-margin, niche products… our analysts believe there’s still plenty more potential growth in the pipeline.Here’s your chance to discover exactly what has got our Motley Fool UK investment team all hot-under-the-collar about this tiny £350+ million enterprise… inside a specially prepared free investment report.But here’s the really exciting part… right now, we believe many UK investors have quite simply never heard of this company before! Image source: Getty Images See all posts by Roland Head Our 6 ‘Best Buys Now’ Shares Roland Head owns shares of Volex. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.center_img Click here to claim your copy of this special investment report — and we’ll tell you the name of this Top Small-Cap Stock… free of charge! Roland Head | Wednesday, 26th August, 2020 | More on: VLX Simply click below to discover how you can take advantage of this. As outside investors in UK shares, we never quite know the full story about what’s going on inside the companies we own. That’s why I think director buying can be such a valuable sign. If an insider wants to spend their own cash on the stock, they must feel good about the future.What I’m looking for is the real deal — one or two directors spending at least £100,000 buying their own shares. I reckon I’ve found just such a company today. The business in question is a small-cap stock whose executive chairman has just spent £825,000 on shares.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…This UK share has doubled in two yearsThe company concerned is Volex (LSE: VLX), a £250m British firm that’s been in business for more than 100 years. Volex makes power cords and cabling assemblies for a range of markets. These include consumer electronics, data centres, medical equipment, factories and — more recently — electric vehicles.The Volex share price has doubled over the last two years and has been a strong performer during the market crash. The stock is up by nearly 20% so far in 2020, compared to a 20% fall for the FTSE 100.Despite this recent growth, I think there’s more to come from this UK share. Volex’s growing focus on higher-value products such as electric vehicle wiring suggests to me that sales and profit margins could rise significantly.I own Volex shares and intend to continue holding. Executive chairman Nat Rothschild appears to agree. He spent £825k on the stock on Tuesday, taking his total stake in the firm to 24.9%.Given the size of his existing holding, Mr Rothschild didn’t need to buy more shares to prove his commitment. In my view, his decision to buy more stock suggests to me that he’s very confident about the outlook for this business.Trading well despite COVID-19The coronavirus pandemic has disrupted many manufacturers around the world this year. Volex appears to have escaped fairly lightly so far. The group’s results for the year to 5 April showed revenue up by 5.2% to $391.4m, with pre-tax profit up 37% at $15.9m.Cash generation remained strong too — the company ended the year with net cash of $21.2m, slightly more than one year ago.Trading since April has been affected by coronavirus, but the impact doesn’t seem too bad. Revenue for April-June 2020 was $96m, which was unchanged from the same period last year. This suggests to me that the pandemic may have slowed Volex’s growth, but hasn’t caused a sudden collapse in demand.The right time to buy?I’m a firm believer in buying UK shares for the long term and not focusing too much on short-term market conditions. But the stock market crash has created some attractive buying opportunities, of which I think Volex is one.Brokers expect the firm’s profits to take a hit this year before bouncing back strongly in 2021/22. The shares trade on 21 times current year forecast earnings, but this multiple falls to just 10.5 times earnings for 2021/22.If Mr Rothschild can continue to deliver a good mix of organic growth and acquisitions, I think the Volex share price is likely to continue rising. I view the stock as a good buy at current levels. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. 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