Feature article:
Directors’ dealings - A legal way to do insider trading
One of the first things that a junior analyst learns is to keep an eye on directors’ dealings, but sometimes this is more complicated than meets the eye. In this article, I look at some less obvious tricks to study directors’ dealings.
It’s worth prefacing these remarks with a comment that, although investors want company CEOs and CFOs to have skin in the game, individuals shouldn’t have all their chips in one basket. It’s perfectly reasonable for a CEO to have an element of diversification in his or her portfolio. The analyst has to try to understand how much is enough, and when a stock sale is more than diversification and amounts to a vote of no (or reduced) confidence in the company’s future.
02 Mar 2022
The Hardman & Co Monthly: March 2022
Volta Finance Limited (VTA:LON), 490 | Real Estate Credit Investments Limited (RECI:LON), 117 | Palace Capital plc (PCA:LON), 228 | Oakley Capital Investments Ltd Registered (OCI:LON), 454 | ICG Enterprise Trust PLC GBP (ICGT:LON), 1,194 | International Biotechnology Trust PLC (IBT:LON), 654 | City of London Investment Group PLC (CLIG:LON), 315 | BBGI Global Infrastructure S.A. SICAV -Ordinary- (BBGI:LON), 128 | Arbuthnot Banking Group PLC (ARBB:LON), 1,085 | Pantheon International Plc (PIN:LON), 317
Sign up for free to access
Get access to the latest equity research in real-time from 12 commissioned providers.
Get access to the latest equity research in real-time from 12 commissioned providers.
The Hardman & Co Monthly: March 2022
Volta Finance Limited (VTA:LON), 490 | Real Estate Credit Investments Limited (RECI:LON), 117 | Palace Capital plc (PCA:LON), 228 | Oakley Capital Investments Ltd Registered (OCI:LON), 454 | ICG Enterprise Trust PLC GBP (ICGT:LON), 1,194 | International Biotechnology Trust PLC (IBT:LON), 654 | City of London Investment Group PLC (CLIG:LON), 315 | BBGI Global Infrastructure S.A. SICAV -Ordinary- (BBGI:LON), 128 | Arbuthnot Banking Group PLC (ARBB:LON), 1,085 | Pantheon International Plc (PIN:LON), 317
- Published:
02 Mar 2022 -
Author:
Brian Moretta | Martin Hall | Mike Foster | Nigel Hawkins | Mark Thomas | Jason Streets | Stephen Clapham -
Pages:
20
Feature article:
Directors’ dealings - A legal way to do insider trading
One of the first things that a junior analyst learns is to keep an eye on directors’ dealings, but sometimes this is more complicated than meets the eye. In this article, I look at some less obvious tricks to study directors’ dealings.
It’s worth prefacing these remarks with a comment that, although investors want company CEOs and CFOs to have skin in the game, individuals shouldn’t have all their chips in one basket. It’s perfectly reasonable for a CEO to have an element of diversification in his or her portfolio. The analyst has to try to understand how much is enough, and when a stock sale is more than diversification and amounts to a vote of no (or reduced) confidence in the company’s future.