Directors Interest Change & Director Trading

[TjamesX]

Just a question for anyone out there...

How does a change in director's interest announcement affect your views of the share price? Do you take the -

1) he/she is doing it for their own reasons and it doesn't reflect any confidence or lack of in the companies share price? or

2) Directors would tend to know more than information than the market and changes in their interest should be watched carefully? or

3) other (I couldn't think of more on the spot)


In my very limited share owning experience I have probably tended toward option 2, depending on the amount and type of interest change (ie options excercise or not). I sold ION shares for a 8% loss (mid August) after a director sold $600,000 worth of shares, two weeks later the share price dropped around 25% in one day, since then it has traded down a further 10% . That was my first ever sharemarket experience (i am happy to report that things have turned for the better since)

 

[RichKid]

Re: Directors Interest Change

I sold ION shares for a 8% loss (mid August) after a director sold $600,000 worth of shares, two weeks later the share price dropped around 25% in one day, since then it has traded down a further 10% . That was my first ever sharemarket experience (i am happy to report that things have turned for the better since)

I would say your 8% loss was a positive experience from one view since you cut your losses before they became gigantic- imagine if you'd stayed in! Still 8% is a fair bit to lose, glad things have improved.

 

[tech/a]

Re: Directors Interest Change

There is a company that makes a living reporting directors change of interests.

There results are pretty impressive as well.

http://www.weeklystockpicks.com.au/pastresults/default.asp

You can register and they will send you a stock pick of the month every month.

 

[TjamesX]

Re: Directors Interest Change

Thanks RK

8% is a large figure but as it was my first stock I didn't have that much in it, so no harm done - interestingly the stock recommendation came from a lecturer at the securities institute who works in the industry, he thought they were oversold.

I'm still interested if changes in director's interests have affected any of your trades, and how you view them??

 

[TjamesX]

Re: Directors Interest Change

TechA

Thanks, have bookmarked the site, I didn't think people would base a whole strategy on it - so there you go.

I'm not sure if I would be paying the $299 to get the report, it would be good to know what there stats were for all recommendations over time - but as I'm not as interested in trading I don't know if it would be for me. I have just tended to follow it for stocks that I own or are on my watch list.

Cheers

 

[tech/a]

Re: Directors Interest Change

RK.

Thanks Fantastic thanks for the link.

Should run a test portfolio trading this stuff coupling with technical analysis.

This looks like a good start.
What do you think.

 

[RichKid]

Re: Directors Interest Change

Yes, Good idea, also see MPI from the same list. Still not settled down yet.

With MIR wonder if the horse has bolted or if it has further to go?
Good to test it out though, let's see how it goes- worth a new thread IMO. I'm watching MPI with more interest, I think it may fall back a bit before surging (it may not)- possibly oversold.

 

[RichKid]

Re: Directors Interest Change

The huge director sales not long ago would have foretold what happened last week to Fortescue Metals- Twiggy Forrest is a rich man. Maybe we can keep this thread going and save ourselves some cash....

 

[RichKid]

Re: Directors Interest Change

RK.

Thanks Fantastic thanks for the link.

Should run a test portfolio trading this stuff coupling with technical analysis.

This looks like a good start.
What do you think.

Did you get around to doing the test portfolio Tech?

 

[tech/a]

Re: Directors Interest Change

Rich.
No .
I'm about to have a look around NZ for a while and then over to Singapore a bit later.So wont have time (or any interest ) but will at some time.

Damn just remembered that disk for you.
Ill do it today---sorry mate!!

 

[RichKid]

Re: Directors Interest Change

Rich.
No .
I'm about to have a look around NZ for a while and then over to Singapore a bit later.So wont have time (or any interest ) but will at some time.

Damn just remembered that disk for you.
Ill do it today---sorry mate!!

Have a great trip Tech, hope you enjoy the change of scenary. You might get to check out the local bourses if you're lucky ; ) Thanks too for remembering the disc, hope you get a chance before you leave.

As for the Directors interests, I think it's better to filter the large buy trades (if going long) with some sort of TA and fundamentals or it'll become too time consuming and inefficient. If we can come up with a reasonale system maybe we can take turns on ASF compiling data, a different member can do it every week on an excel spreadsheet and someone can plug it in on the weekend (you or GP or someone with the proper software).

The other option is to just look for all large dir transactions affecting current holdings or those on your personal watchlist.

 

[RichKid]

Recently got very annoyed with QGC directors for not disclosing buying earlier but apparently ASIC gives them 5 days (should be 24hrs imo as it's quick to lodge electronically and they do know way before they buy/sell to be prepared to release the info), 5 days imo is too long for these small co's as sp's jump a lot. Note that delayed/innacurate releases have to be taken into ac when designing a system that trades these anncts.

DIRECTORS’ SHARE TRADING COMES INTO QUESTION
www.aireview.com issue 82 27Oct05

It is pretty much a given in this world that if directors of listed companies fail to register a sale of shares in the company in the statutory time allotted, immediate assumptions of some form of insider trading will be made.
This may prove to be far from the truth, and given directors are (a) often only allowed small windows of opportunity for share sales and (b) do not wish to create some sense of panic from the revelation that a director has seen fi t to sell (what does he know?), one can understand why the subject of director’s sales is a touchy one all round.

But why do directors often fail to make the required disclosures? The Australian Securities and Investment Commission (ASIC) has been forced to undergo a crackdown on such failures after finding the problem is now “widespread”. While some disclosures have been understandably a couple
of days behind, there is a signifi cant level of disclosures which are late by weeks or months.

The Australian Financial Review reports a report by the BT Governance Advisory Service, on behalf of six superannuation funds, has found that 60% of the largest 200 listed companies had failed to meet the basic disclosure rules. Under the Corporations Act, directors must notify the market within 14 days of changes in their holdings, while under the ASX listing rules they must notify within 5 days.

The penalty for the breach is a mere $1,000. This might explain a lot. Or three months in gaol mind, but this has never been imposed. Given in some cases the share sales in question have occurred prior to results announcements, maybe an ASIC crackdown could be supported by some more signifi cant penalties. Over to you John.

 

[johenmo]

Am curious about directors since lost $2K in BNB (glad it was a dabble in BNB). Came across the site below which may be helpful to some. And didn't want to start a new thread.

Registration is free.

Cheers


http://www.directorstransactions.com.au/Directors/?letter=E

 

[johenmo]

Here's an example - took me more than 20 mins to work out how.

 

[nunthewiser]

you can get director dealings daily here

http://www.businessspectator.com.au/bs.nsf/filter/Director+Dealings?opendocument

you can get major holder daily dealings here.....


http://www.businessspectator.com.au/bs.nsf/filter/shareholder+notices?opendocument

all free , all daily , all easy to read

haveaniceday

 

[johenmo]

What I like about the site I "found" is it shows a trail (of success/destruction/add your own term) of the directorships. It's easy to read - I couldn't figure out how to stick the screenshot in!

But everything helps.

 

[tech/a]

Re: Directors Interest Change

There is a company that makes a living reporting directors change of interests.

There results are pretty impressive as well.

http://www.weeklystockpicks.com.au/pastresults/default.asp

You can register and they will send you a stock pick of the month every month.

Let me re phrase from 2004

There WAS a company!!-------------