Yesterday Jersey Oil and Gas (LSE:JOG) announced a Director’s Buy of 25,000 shares by Chief Operating Officer, Ronald Lansdell. Naturally, share purchases by company executives are normally well received but there are over related factors to consider.
Directors, along with all other shareholders, must adhere to the Market Abuse Regulations (MAR). This dictates that whenever directors are in possession of inside information that may have a material impact on the share price, they cannot trade. In addition, there are also ‘Closed Period’s where Directors cannot deal. These are generally 30 days prior to the announcement of financial results. So, we can derive from the Director buy that the company does not currently have any price sensitive news to share with the market at this time. Director buys can be a strong statement and serve as a way of bolstering the share price. Although I’m not suggesting it is the case in this circumstance, it’s worth noting generally that some companies might consider using director dealings strategically.
Back to Jersey Oil, and the share price is currently consolidating around £1.90. The market initially reacted positively to the Director share buy reaching £1.96 but ended the day down slightly at £1.89. With summers Verbier drill approaching fast, and the share price still floundering below the recent placing price, I expect some interested investors currently waiting on the sidelines will be looking to take their positions soon.
The share is currently moving in a broadly upward channel and price action is again squeezing into a triangle formation. We’ll have to wait and see if drill anticipation is strong enough just yet for a decent move north towards previous highs.
Author: Stuart Langelaan
The author of this piece owns shares in the company written about above