In this section, we’ll pick out a selection of the most important director dealings of the week so you won’t miss them.
Why are Director Dealings important?
For the purposes of this section, director dealings are transactions of shares that directors make in their own business. It’s a form of insider trading but there are strict rules around disclosure.
A director buying shares in their own company can be a sign of confidence that the share price is likely to go higher, particularly if the sums involved are considerable. It is not always the case though. Directors can use these disclosures to give the impression of confidence in order to generate interest in their company. You’ll need to decide for yourself.
Conversely, a director selling shares in their business is rarely seen as a vote of no confidence. After all, it doesn’t look great for a director to sell shares if they feel the share price has gone as high as it will go or if there is a bad piece of news around the corner. Selling shares is often done as a form of remuneration or bonus where a director has achieved their targets, gets to buy shares at a discounted rate and then sell them at the current market rate. Look closely for the reasons associated with the sale before jumping to any conclusions.
How to use director dealings
Director dealings can provide a useful barometer for how the company fortunes are perceived internally. While director dealings should not be the single criteria to make an investment decision in a stock, they can prove to be a useful measure to re-enforce your research, or provide you with some useful ideas.
Take a look at the articles below and be sure to check back as we will be updating this page on a regular basis.