Insider trading activity can provide valuable insights into a company’s prospects. For example, the FTSE 100 stocks in this article have recently seen significant director dealings, which may be worth your attention. So let’s look at these stocks to see what the insiders are trying to tell us.
Company directors and shareholders often have access to inside information about the company that is not available to the general public. As a result, their buying or selling of company stock can signal their confidence in the company’s prospects.
For example, if these investors buy, it could signify that they think the stock is undervalued and set to soar. But if insiders are selling, it might indicate that they do not believe in the company’s future. So, what do these insider trades tell us about the following FTSE 100 stocks?
Lloyds Banking Group (LSE: LLOY) Insider Activity
An independent director of this Banking Group made a significant investment in the company by purchasing over £190,000 in assets in early December. This development follows the director’s previous holding of more than £500,000 in Lloyds shares.
Some analysts view this insider trading activity as an indicator that shareholders believe in the company’s future. One plausible reason for the director’s confidence in the company may be the anticipation of soaring interest rates, potentially benefiting Lloyds.
As interest rates increase, the financial institution can charge higher rates for loans, leading to increased income. However, it is also crucial to consider the potential long-term effects of rising interest rates, such as a slowdown in new loans, failure to pay, and cancellations.
Other FTSE 100 Assets with High Insider Activity
In late October and November of 2022, several executives at Investec, a London-based investment management company, decided to sell off a significant portion of their company’s shares. One executive disposed of £7 million in assets, while two other directors sold over £400,000 in stocks.
In November 2022, a board member of Endeavour Mining, a gold mining company, divested £4.1 million worth of the company’s shares. In addition, AstraZeneca, a multinational pharmaceutical company, saw its executive finance officer sell £2.1 million in shares in late November 2022.
Furthermore, Sage Group’s software company directors sold £174,000 worth of shares in Mid-November 2022. As a result, Sage Group sold an additional £358,000 in assets and £197,000 in December 2022.
It is prudent to consider the full context and not solely rely on directors’ dealings when making investment decisions. However, they can still be a valuable source of information in the research process.
For example, if a director were to sell all shares at or near an all-time