At the end of each week I like to look at which shares have experienced meaningful insider buying.
This is because insider buying is often regarded as a bullish indicator as few people know a company and its true value better than its own directors.
Three shares which have reported meaningful insider buying this week are listed below:
Adacel Technologies Limited (ASX: ADA)
According to two change of director’s interest notices, independent non-executive director Michael McConnell has been busy buying the shares of this air traffic management systems provider this week. Mr McConnell picked up a total of 187,842 shares through on-market trades for a total consideration of approximately $163,000 or 86.8 cents per share. The director appears to believe that Adacel’s shares have fallen into the bargain bin after a sharp decline last week. Its shares crashed lower after management advised that first half profit before tax is expected to be 65% to 70% lower than the prior corresponding period. Adacel’s shares do look cheap now, but I’m not a fan due to its inconsistent performance.
Breville Group Ltd (ASX: BRG)
Two change of director’s interest notices reveal that non-executive directors Dean Howell and Lawrence Myers have picked up shares through on-market trades. Myers snapped up 20,000 shares for a total consideration of $236,000 and Howell bought 7,500 shares for a total consideration of $92,667. These directors may be confident that Breville’s new product launches are going to drive solid sales growth over the coming 12 months. I’m a big fan of Breville, but unlike these directors I’d prefer to buy its shares at a cheaper price.
Corporate Travel Management Ltd (ASX: CTD)
According to a change of director’s interest notice, the embattled corporate travel specialist’s CEO, Jamie Pherous, has made another significant purchase of shares. Last week Mr Pherous took advantage of the selloff to pick up $2.4 million worth of the company’s shares. This has been followed up with another on-market trade this week which saw the CEO buy a further 70,000 shares for approximately $1.56 million. While I think that its shares do look great value right now, I intend to hold out until the short seller attack drama blows over.
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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 Adacel Technologies Limited and Corporate Travel Management 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.