I consider Directors (CEO) buying/selling as a poor predictor of company performance. For every argument supporting the correlation there is one against. For example:
* the obvious primary reason is, the board need to be careful not to be seen trading on insider knowledge - irrespective of the trading window
* secondly, some directors may have other preferences or demands for their cash, they are no different to other employees in that respect
* if all directors wanted to profit from their companies performance why wouldn't we see mass buying on those companies that have seen their SP rocket- directors are well placed to see it coming ? I think the above two points partly answer that.
In addition wouldn't the CEO be in constant communication with non-exec director Mark Bradley - a member of the audit and risk committee? Mark chose to buy 250,000 on market at $1.32 just over a month ago.
On balance I would prefer to see directors buying it would only reinforce; however, ultimately I don't consider it a strong indicator one way or the other.
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