There is an old adage in the stock market: directors buy for only one reason but sell for many reasons. In this week’s infographic, we investigate whether directors dealings really matter.

Whenever we see lots of director selling all sorts of chatter arises about how bad it is. We get newspaper headline articles and twitter streams full of fear mongering. Now sure directors know more than we do (in a sense they are insiders), but as I said up front, directors sell for many reasons and seldom is it because a company is in trouble.

Below is an infographic of Capitec share price and director dealings from January 2012 to February 2015, total sales from directors is almost R1.4billion and we’ve seen all sorts of fear chattering. Yet the price is hovering just below R400, almost double what many of the sales were done at (including a large R384million sale at R251.13).

So sure, monitor director dealings but don’t take the knee jerk fear response when they are selling.

Click on image for full size.