Rolls-Royce: Directors Dealings (or not)?

Rolls-Royce @ 627p, -17p (-2.64%) as at 10:16.

Well I started this post with a bigger slice of optimism than I am going to end it.
Opening up this morning I was very interested to note share purchases by R-R directors. Significantly, this would be ahead of the interim results on the 28th July:

- 6 July - Mike Terret - 7283 @ 654.29p

- 6 July - Andrew Shilston - 8807 @ 654.29p

- 6 July - Colin Smith - 3337 @ 654.29p

- 6 July - Peter John Byrom - 3207 @ 654.29p
- 6 July - Iain C Conn - 273 @654.29p

However, given the nature of executive share options etc I was initially suspicious of both the dealing date and the executed price.
Further digging reveals these to be share purchases related to the C shares issued in lieu of the dividend.
Not as exciting as first thought then and no clues on the interim results as it is difficult to read any reasoning beyond managing income tax/capital gains for the individuals involved.

I looked at C shares in an earlier post: What to do with a problem like C shares?
and reviewed the various options and implications to my own situation. In the end I opted for the cash conversion and the potential CGT implications that apply.

Looking back with the benefit of hindsight, the C shares were issued on the 20 April when the share price was 633.5p but re-investment hasn't taken place until the 6 July when the share price was 654.29p. Does that add up to a loss of 20.79p inc dealing charges as you have bought less shares?


When looking at the merits of each option, the comparison will always be in flux as re-investing will continue to reap dividends into the future but it is still a less attractive re-investment option than the previous options offered by the company (mainly due to dealing charges and the unknown market price). 
Ultimately, I will still re-invest the dividends I have received but at a time and amount of my choosing.
I have options over the price I choose to re-enter at (although the risk is that it could just go straight up), the amount (I can aggregate with other dividends or other funds), the company (it doesn't have to be R-R), and I even have a little control over the dealing charges should I use one of the low cost monthly purchase options open to me.


So it might not be the right option for everyone but I am happy with the option I went with.

Earlier posts:
- What to do with a problem like C shares?  
- Paris Air Show: Update on Rolls-Royce.