On October 14th I posted the following article ‘Are directors buying shares?’, prompted by your questions.

‘As at October 10th the number of companies in the FTSE 350 indicating net directors dealings over GBP 50k over the period I asked for (1, 3 and 12 months) were as follows:
1 month to October 10 2008:
26 companies showed net selling over a cumulative GBP 50k, and 32 companies showed net buying.
3 months to October 10th 2008:
58 companies showed net selling, and 54 companies net buying
12 months to October 10th 2008:
144 companies showed net selling, and 130 companies net buying.’

 

I’ve just run the Digitallook screen again, and find that over the past month, to today, companies in the FTSE 350 which exhibit cumulative director share dealing activity greater than GBP 50k are as follows:

6 companies show net selling, and 59 companies show net buying.

Over the past week, the screen shows 3 companies showing net selling, and 18 companies showing net buying.

This indicates that Buyers outnumber Sellers by between 6:1 and 10:1.

A very powerful signal that company directors think shares are cheap.

I guess valuation has something to do with it. The FTSE 100 is roughly 10% lower, and the FTSE 250 very roughly 20% lower over the one month period (compared to the one month to October 10th). Anecdotally most of the buying activity has occurred in FTSE 250 stocks.

For followthedirectors comments on companies exhibiting director buying activity click here (This is not a comprehensive list, but companies that we believe warrant comment).

For other general market commentary see Market Musings here.

For the excellent Digitallook screening tool go to Digitallook.com