interservelogo300ppiInterserve (ISV, 203p) is a services, maintenance and building group (www.interserve.com).

In May to September 2007, Executive Directors Vyse, Jones and Ringrose exercised a significant volume of options, and sold all the resulting shares at between 496p and 526p.

Vyse has since retired, but Adrian Ringrose (CEO), Tim Jones (CFO) and Steve Dance (Exec Director) in March this year started buying shares 60% cheaper, at between 199p and 213p.

Ringrose bought 23200 shares at 213p taking his holding to 112,000 shares, Jones bought 17228 shares at 200p, taking his holding to 61,000 shares, and Dance bought 13427 shares at 199p, inititating a position. (17th to 30th March 2009- source London Stock Exchange).

They have since been followed by Exec Director Bruce Melizan, who on April 8th bought 13954 shares at 192p, initiating a position, and David Thorpe, a Non Exec, also initiated a position by buying 12793 shares at 194p on April 21st.

Conclusion

That makes all four Executive Directors and one Non Exec buying shares in Interserve. Of course this sounds very convincing, but if we look at the historical performance shown by companies we have monitored since November 2007, not so compelling.

In the seven cases where five directors have bought shares, the average relative performance has been -23%.

In the five cases where four or more executive directors have bought shares, the average relative performance is 0.84%.

Directors in these cases may have been subject to group think‘. Without qualitative analysis (interviewing all the directors) we can’t say whether this is true or not.

So history is against you. Of course the past is no indication of the future !!

View on Interserve: Neutral– could change to positive if we see more non exec purchases.

Value of signal (directors dealings)- Weak