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Director’s dealings

Another piece of the information jigsaw you might find useful is whether the directors of the company have been buying or selling its shares. Many investors take a purchase as an indicator of a positive opinion of the firm’s prospects by someone with superior access to information – if they are spending their own money on the shares, perhaps there is reason to think they might be undervalued. On the other hand, a sale may not be as negative as it first appears – school fees might need to be paid, or rational diversification is taking place: much depends on context.

A good website for director’s dealings is www.moneyam.com which displays what directors bought/sold, as well as each of their overall holdings, and at what volume. ...