Sir John Banham, Chairman of Johnson Matthey (JMAT, 1600p), yesterday bought 7400 shares at 1604p, investing £119,000 and taking his holding to 15400 shares.

Is this significant as a signal for investors?

Yes:

First purchase that I can find for any director looking back to 2004.

First purchase by Banham since he was made Chairman in April 2006.

Decent size in £.

Doubles size of holding for Banham.

No:

Sole buyer. Need to see other directors following Banhams lead by investing their own hard earned $$ before I invest in JMAT.

All the previous ‘acquisitions’ by directors have been through ‘Long Term Investment Plan’ options, whereby directors exercise the options and sell off around 40% to satisfy their tax liability.

So the jury remains out, but could change if/when we see other directors buying. As it stands, this is a WEAK SIGNAL.