Directors are buying and selling these FTSE 100 stocks heading into 2023

The people who run the company and sit on the board have an informational advantage over the rest of us. If he buys or sells shares, I can assume that it’s good news if the former, and bad if the latter. The following FTSE 100 The stock has seen a significant level of director turnover through 2023.

Lloyds shares are bought by directors

A non-executive director of Lloyds Banking Group (LSE: LLOY) bought £198,994 worth of shares in the company on 1 December 2022. Considering that after the transaction the directors held £531,662, this is a significant investment. It can be seen as a vote of confidence in these FTSE 100 stocks from those sitting on the board.

Perhaps it has something to do with rising interest rates and how Lloyds benefited from them. Banks can send higher rates to customers who take loans from banks. However, it is not enough for savers with higher interest rates on these accounts. Thus, analysts believe that for every 0.25% the Bank of England raises interest rates, Lloyds will gain £200m in income.

But at some point, higher rates may not mean higher income. As debt becomes more expensive, new loan applications may slow. As interest payments rise, defaults and write-offs can increase as customers struggle to repay their loans. And savers may get fed up and look for other places to put their money closer to market rates for interest.

Directors are selling these FTSE 100 shares

A director of Investec, an asset management company, sold £7.3m worth of shares in the company last month. At the end of November 2022, two more directors let go of shares worth £464k. An Mining Business board members sold £4.1m of shares in the company on 16 November 2022. Some £2.1m worth of shares in AstraZeneca removed by the chief financial officer on November 23, 2022.

Finally, the director of Sage Group sold £174k of shares in the company on 18 November 2022. A further £358k was sold on 6 December 2002 and £197k on 8 December 2022.

What should I do with this information?

Buying a director may seem like a vague signal that he thinks it will be good for the company. However, they may be contractually obligated to hold certain company shares. Perhaps they want to buy to cast the company in a favorable light.

A director who sells may do so because he thinks the share price is falling. However, they may also be awarded a significant number of shares as part of their compensation. As a result, their investment portfolio is heavily concentrated in the stocks of the companies they work for. In that case, selling for diversification makes sense.

I will not make a decision based solely on the director’s business. However, they are part of investment research. So much investment is about judgment and context. A director selling a chunk of shares at or near the all-time high price without being awarded a significant amount of compensation would really trouble me and require more research. Buying smaller ones, at regular intervals, probably wouldn’t get me too excited.