Once a week I like to look at which shares have experienced insider buying.
This is because I see insider buying as a bullish indicator as few people should know a company, its industry, prospects, and true value better than its own directors.
Last week there was minimal insider buying due to directors taking advantage of dividend reinvestment plans. So I thought I would look back at three standout insider buying notices from over the last few weeks. They are:
Breville Group Ltd (ASX: BRG)
Late last month this home appliance manufacturer’s non-executive chairman, Steven Fisher, picked up a decent number of shares through on-market trades. According to the change of director’s interest notice, Mr Fisher picked up 10,000 shares for a total consideration of $129,671.20. This worked out to be approximately $12.97 per share and brought his total holding up to 110,000 shares. With its shares pulling back a touch since then, I think it could be worth following Mr Fisher’s lead. Incidentally, a broker note out of Ord Minnett last month slapped a buy rating and $15.16 price target on the company’s shares.
Myer Holdings Ltd (ASX: MYR)
In the middle of last month a change of director’s interest notice revealed that the department store operator’s new CEO, John King, picked up a sizeable 100,000 shares for a total consideration of $43,500. It certainly would have paid to follow Mr King’s lead. Myer’s shares are up almost 20% from his purchase price of 43.5 cents per share. Whether there are further gains ahead for its shares will depend largely on the success of Mr King’s turnaround plan. Analysts at Citi aren’t convinced and have a sell rating and 36 cents price target on Myer’s shares.
Star Entertainment Group Ltd (ASX: SGR)
Early in September a change of director’s interest notice revealed that non-executive director Richard Sheppard had dipped into the market to pick up 25,000 shares of the casino and resort operator through an on-market trade. Mr Sheppard paid a total of $137,578.13 or $5.50 per share and boosted his total holding to 125,000 shares. Since then the Star Entertainment Group has slid 7% lower to $5.11, which I believe could be a buying opportunity for investors. Especially given how a broker note out of Ord Minnett last month declared its shares as a buy with a $6.10 price target.
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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.