Interquest – Director’s Dealing why bother?

PUBLISHED: 14 Nov 2012 @ 07:44 | Comments (0) | More info about Tom Winnifrith

I happen to think that shares in AIM listed IT recruitment business Interquest (LSE:ITQ) are cheap but today’s announcement on director dealing is one of those ones which asks the question? Why? What are you trying to say?

The statement says that CEO Gary Ashworth has bought 10,000 shares at 45.75p per share. So with Stamp Duty and dealing costs Gary must have written a cheque for all of £4,600. Mr Ashworth is a wealthy man and I bet that his Christmas shopping costs more than that. It is a paltry sum. Moreover for a man who now owns 12,754,912 shares in the company (38.47% of the equity) this purchase is not really going to cause a massive realignment of his portfolio. As such I hardly think it is a cue to fill your boots.

Having said that, it gives Ashworth 10,000 additional reasons to hold the dividend. I think that this is now almost certain. As such the shares are probably a decent long term buy. At 45.5p the company is valued at around £15 million and should by Christmas have cut its debts to c£4.5 million. Those debts should be cleared within a couple of years. Offering a yield of 4.4% and on a calendar 2013 PE of 5.2 this is one to tuck away. A more meaningful purchase from Ashworth would have sent an even clearer signal of that.

A more detailed analysis of Interquest can be found here

Libertarian investment writer Tom Winnifrith writes extensively for a number of US and UK financial websites. All of that free material appears on his own blog, which also carries his extensive original non financial material, at TomWinnifrith.com – for alerts on all Tom’s writings follow him on twitter at @tomwinnifrith

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