At the end of each week I like to look at which ASX shares have been experiencing insider buying.
This is because I think keeping tabs on insider buying is important as it is often seen as a bullish indicator. After all, few should know a company, its prospects, and true value better than its own directors.
Two shares which have been experiencing meaningful insider buying recently are listed below:
Orocobre Limited (ASX: ORE)
According to a change of director's interest notice, non-executive chairman Robert Hubbard has dipped into the market to pick up the shares of this lithium miner. Mr Hubbard added a further 5,000 shares though an on-market trade for a total consideration of $23,050 on Wednesday. This brought his holding up to a total of 75,293 shares. Orocobre's shares have fallen 38% since the start of the year due to concerns over future lithium prices. Judging by this recent purchase it would appear that the non-executive chairman feels confident enough in the outlook for the industry.
Sigma Healthcare Ltd (ASX: SIG)
A change of director's interest notice out of this pharmacy chain operator and distributor reveals that yet another insider has seized on recent share price weakness to top up a position. Non-executive director Raymond Gunston has become the fifth insider in the space of a month to buy shares with two purchases in recent days. The first was 155,000 shares for a total consideration of $72,850, closely followed by a purchase of 45,000 shares for a total consideration of $21.375. Both purchases were made on-market and lifted Mr Gunston's holding to a total of 428,604 shares. Sigma's shares are down by almost 50% since the start of the year and insiders clearly see a lot of value in them at these levels. While this certainly does seem like a buy signal, I'm not overly bullish on Sigma and rival Australian Pharmaceutical Industries Ltd (ASX: API) due to the impact Chemist Warehouse is having on the market.
