ann after the 18th , page-3

Follow the smart money:

Share purchases made by a director with their own money should send a stronger signal than allocations through executive share schemes or the exercise of company granted options. The ASX notice will indicate this. An even stronger indication is if the shares have been purchased with borrowed money, but this information is less readily available.

2. A British research company, Director Deals, undertook a study of returns achieved based on directors’ transactions between 1999 and 2003. They found that significant buying by directors was followed by an average rise of 23.5 per cent in the year after the purchase, and significant selling was followed by an average fall of 15.5 per cent.

3. European Business School academics Dardas and Guttler analysed short-term announcement effects on 2782 companies in eight European countries between 2003 and 2009. In keeping with the intuitive hypotheses proposed in this article, they found the magnitude of the announcement effect depended upon the transaction size, and that it was more significant if there were multiple trades by different directors on the same trading day. They also found the results were stronger for purchases than sales and that the corporate position of the director was positively correlated to the size of the announcement effect.

Stephen Gemell 18/12/12 $ 23,000 for 200,000 shares on market.

Stephen Promnitz, 05/10/12 $110,000 for 1,000,000 shares on market.