Insiders have been buying these ASX shares

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.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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