Once a week I like to look at which ASX shares have been experiencing meaningful insider buying.
This is because insider buying is often seen as a bullish indicator as nobody should know a company and its prospects better than its own directors.
Two shares which have been experiencing insider buying recently are listed below:
Altium Limited (ASX: ALU)
According to a change of director’s interest notice, non-executive director Raelene Murphy has dipped into the market to buy more shares in the printed circuit board (PCB) design software provider. Raelene Murphy picked up 2,000 shares through an on-market trade on Friday of last week for a total consideration of $45,180. This lifted her shareholding in the fast-growing tech company by approximately one-third. Considering Altium’s shares have gone gangbusters over the last 12 months and trade on a sky-high earnings multiples, I see this insider buying as a positive development. Clearly Murphy sees enough value in Altium’s shares to put more of her own hard-earned money into them. I think Altium is a great buy and hold investment option due to its exposure to the Internet of Things boom.
Metcash Limited (ASX: MTS)
A change of director’s interest notice reveals that non-executive director Murray Jordan has picked up 19,610 shares in the wholesale distributor through an on-market trade on Friday of last week. Mr Jordan paid $2.58 per share, equating to a total consideration of $50,594. This purchase almost doubled his holding in the company to a total of 42,651 shares. Mr Jordan appears to have seized on recent share price weakness caused by the probable loss of the Drakes South Australia supply contract and a disappointing full-year result. So far it has worked out well for the non-executive director, Metcash’s shares are up 3.5% since his purchase. But given the issue with its Drakes South Australia supply contract and rising competition from Woolworths Group Ltd (ASX: WOW) and Wesfarmers Ltd (ASX: WES) operated Coles, I’m not planning on joining Mr Jordan as a shareholder any time soon.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool Australia owns shares of Altium. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.