My name is Simon Winfield, and I have worked in leading investment banks in London and New York over the last 25 years, marketing investment ideas to the worlds top institutional investment managers and hedge funds.
Over the years I have met with senior management of hundreds of UK and European companies. I found managements’ body language and what companies didn’t say to investors to be far more valuable than what they did say, and I learnt to take the corporate spiel with a large pinch of salt.
Directors personal share dealings cut through the talk. I see them as a sign of what management really think of the opportunities and risks their company faces, as well as the current and potential company valuation.
In looking at directors dealings I ignore all the ‘incentive plan’ deals, where the company matches what you buy. Why wouldn’t you buy stock if you’re getting it half price? I ignore all the options exercising too, as this is usually seen by directors as pay which needs to be turned into cash.
Anything I write here is my personal opinion, and is not a recommendation to buy or sell shares, just my commentary on activity in the market.
If you wish to contact me, either fill in the wee comment box at the bottom of a post, or send an email to followthedirectors@gmail.com
Reading List:
‘Profit from Legal Insider Trading’ by Moreland
‘The Vital Few vs The Trivial Many’ by Muzea, an ex broker who has set up an Insider Trading service for US stocks at : http://www.smartinsider.net/index.asp
‘Investment Intelligence from Insider Trading’ by Nejat Seyhun
Also see academic papers at:
The Profitability of Insider Trades in the Dutch Stock Market (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=498042)
‘Insider purchases, and not analyst recommendations, possess incremental predictive power for future stock returns’ (Hsieh, Ng and Wang, 2003- Analyst Stock Recommendations and Insider Trading Activities.)
followthedirectors... a study of directors share dealings 
3 comments
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December 4, 2007 at 9:14 am
Alistair Laing
Now to your Directors Share buy/sell web site. We had discussed this previously and noted that Directors share sales may be influenced by domestic issues. Sales to fund a country estate (John Dodd at Artimis), buying a bigger boat than Gosling ex NCP, funding the purchase of WW2 plance, classic cars OR the expensive divorce!!
As well as Directors anticipating market movements down (sell), up (buy) surely they will also monitor the P/E of their shares? I noted your piece on the banking sector with particular reference to Barclays and RBS where it sseemed to me that hedge funds were short selling the shares. Now, despite lack of reporting on these banks exposure to US (and later perhaps UK!!) sub prime, both these shares had outstanding yields are their share price was driven lower. OK, so if Barclays and/or RBS do a Baring Bros. then every shareholder of UK equities is going to catch more than a cold!!
So, what is my point? Well take RBS as my example. I have been watching their share price and P/E for a few years. When they were heavily recommended by most media financial pundits towards the end of last year and then split their shares I took more notice of this stock. As they have Citizens Bank in the US they would clearly be influenced by the sub prime fiasco and, as mentioned above, by any similar turn down in the UK. About two months ago I started to buy RBS as they passed 25%, 30%, 35% and 40% off their peak price of 720p. I also had an opportunist buy order in for 45% which has not happened (yet!!) but did follow my nose and make my last purchase at 385 during a downward spike. Now, while my hope was always that the stock would recover mid term (2 – 5 years) I was really punting on the better return than possibly diminishing savings rates and hoping that the near 8% dividends would not come off too much. We shall see.
I am impressed at how you manage to back track what directors did earlier this year (sell) while coming back into the market later when their shares were heavily discounted.
I have now flagged up your site as a favourite place as a space to watch!!
Yours aye,
Alistair.
December 18, 2007 at 3:34 pm
Beranrd
Just to say I find your web site very interesting. I hope you keep it going. Wishing you a successful 2008.
December 19, 2007 at 4:15 am
winnie
Thanks Beranrd, I appreciate your feedback.
Wishing you a successful 2008 also!!
Regards,
Simon