Insiders have been selling these ASX shares. Should you?

Insiders have been selling the shares of InvoCare Limited (ASX:IVC) and two others this month. Should you?

| More on:
handshake agreement

Insider buying is often regarded as a bullish indicator as few should know a company better than its own directors.

The idea is that if they have the confidence to buy shares, it could be a sign that things are going well and they expect them to rise.

Conversely, when directors sell shares it is often regarded as a bearish indicator as you’d be unlikely to sell shares if you felt they were about to increase in value.

With that in mind, here are three shares which have experienced notable insider selling this month:

InvoCare Limited (ASX: IVC)

According to a change of director’s interest notice, non-executive director Richard Davis offloaded 40,000 shares through an on-market trade earlier this month for an average of $12.65 per share or a total consideration of $506,000. This reduced Mr Davis’ holding by 13.5% to a total of 260,000 shares. No reason was given for the sale, but I can’t say I’m overly surprised with it. Although its shares are within sight of their 52-week low, I still feel the funeral company’s shares are overvalued given its limited growth potential. In light of this, I fear they could drift down to new lows if its performance doesn’t pick up soon.

Rhipe Ltd (ASX: RHP)

This provider of wholesale subscription software licenses has seen two directors offload a large number of shares this month through on-market trades. Michael Tierney sold 700,000 shares for a total consideration of $826,000 and Dawn Edmonds sold 1,300,000 shares for a total consideration of $1,534,000. Rather helpfully Rhipe released a statement explaining the share sales. The statement advised that the sales were made “to diversify their personal portfolio’s and to encourage liquidity and diversity in the stock.” Before adding that both directors “are committed to remaining long term shareholders in rhipe and driving its ongoing success.” I feel this is a reasonable explanation and wouldn’t read too much into things.

Whitehaven Coal Ltd (ASX: WHC)

This coal mining giant has experienced heavy insider selling this month. Change of director’s interest notices reveal that the Hon Mark Vaile, John Conde, and Paul Flynn have been selling shares through on-market trades. The Hon Mark Vaile offloaded 423,865 shares for a total consideration of $2,084,684, Mr Conde sold 60,000 shares for $309,666, and Mr Flynn sold 668,875 shares for a total of $3,327,941. The latter explained that his sale was made “to predominantly fund tax liabilities arising from participation in the Company’s Equity Incentive Plan.” Last week Credit Suisse warned investors not to believe the coal price hype. I think this could make it worth considering following the lead of these directors and selling shares.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

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

More on Share Market News

ASX shares upgrade buy Woman in glasses writing on buy on board
Broker Notes

2 ASX shares to buy in the current bloodbath

The fear of US interest rates heading upwards has well and truly wafted across the Pacific, sending the S&P/ASX 200 …

Read more »

Female scientist working in laboratory
IPOs

Firebrick Pharma (ASX:FRE) is floating on the ASX today. Here’s what you need to know

Key points Firebrick Pharma will debut on the ASX at 12:30pm AEDT today The company is developing a nasal spray …

Read more »

A man activates an arrow shooting up into a cloud sign on his phone, indicating share price movement in ASX tech shares
Share Market News

Is the Betashares Nasdaq 100 ETF (ASX:NDQ) an opportunity in this market correction?

Could the Betashares Nasdaq 100 ETF (ASX: NDQ) be a good opportunity during this correction for both the global share …

Read more »

A woman shouts through a megaphone.
Share Market News

2 ASX growth shares to buy in February with 40% upside

If you’re looking to make some additions to your portfolio in February, then the two ASX shares listed below could …

Read more »

2 workers standing in front of a wind farm giving a high five.
Opinions

ASX shares set to conquer the carnage: expert

It’s been a depressing ride for investors this month as the S&P/ASX 200 Index (ASX: XJO) has plunged more than …

Read more »

mining worker making excited fists and looking excited
Resources Shares

Is the BHP (ASX:BHP) share price a buy in all of this volatility?

Key points The BHP share price has been outperforming the ASX 200 in 2022 Iron ore continues to rally higher, …

Read more »

Business woman watching stocks and trends while thinking
Share Market News

5 things to watch on the ASX 200 on Friday

On Thursday, the S&P/ASX 200 Index (ASX: XJO) fought hard and was able to record a small gain. The benchmark index rose …

Read more »

share price plummeting down
52-Week Lows

3 buy-rated ASX shares that just hit 52-week lows

With the market under significant pressure this month, a good number of shares are trading at 52-week lows. While this …

Read more »