Director deals suggest this FTSE 100 stock could be poised to shoot higher

One thing I always look out for when researching stocks is the director’s offer. Company directors have more information about their business than anyone else, and research shows these ‘insiders’ tend to make well-timed stock purchases and sales.

Here, I want to highlight a FTSE 100 that stock has seen some significant buying from company insiders recently. I think it can be worth investing in the end of this activity.

Purchasing director

This deposit Sage (LSE: SGE). It is a leading software business that provides cloud-based accounting and payroll solutions for small- and medium-sized businesses globally.

Recently, there have been some pretty big director buyouts here.

The biggest one is Chief Product Officer Walid Abu-Hadba. He bought 40,000 shares in January, investing around £300,000 in the company.

Since then, however, he has continued to increase his position, buying 10,000 shares on February 13 and March 31 at prices between £7.65 and £7.75 per share. In total, the CPO – who previously spent 20 years in the Microsoft – has bought about £450,000 of Sage shares this year. It’s a big investment.

Another stock buyer is CEO Steve Hare. In mid-February, he acquired 10,000 shares at £7.56 a share, investing around £75,600 in the company.

Other directors who have bought shares recently include board member Roisin Donnelly, who bought 10,000 shares (£7.83 each) on February 8 and board member Maggie Chan Jones, who bought 10,000 shares (£7.49 each) on March 24.

Clearly, sentiment towards shares in the company is quite bullish at the moment.

Time to buy?

Now, I will not buy shares just because the director has bought them. However, looking at the basics here, there is a lot to like about the company.

Healthy business performance for startups. In January, Sage said it had started the year with total revenue for the three months to the end of December rising 10% year-on-year. Recurring revenue grew 12% year-over-year.

The group notes in an update that the solution helps businesses improve productivity and resilience.

Second, there is a lot of growth potential here. The research firm expects the market for cloud-based accounting solutions to grow 15-20% annually between now and 2030. This market growth should provide healthy tailwinds for Sage.

Finally, Sage is a profitable company with predictable cash flow.

Putting all this together, I think the stock is worth investing in right now.

One downside here is that the stock isn’t cheap. Currently, the price-to-earnings ratio (P/E) is expected to be approximately 26. This adds some risk to the investment case.

Insiders don’t seem to be worried about this valuation. He believes that there is a price to offer in the current share price.

After all, insiders only buy stocks for one reason. And that’s to make money.