Insider buying is often regarded as a bullish indicator as few people should know a company better than its own directors.
The theory 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 appreciate in value.
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 recently experienced notable insider selling:
IDP Education Ltd (ASX: IEL)
According to a change of director's interest notice, the non-executive director and chairman of this student placement services and language testing services company has been selling shares this week. The notice reveals that Peter Polson sold 17,735 shares for a total consideration of $275,069 through an on-market trade on May 1. This reduced Mr Polson's holding down to a total of 86,655 shares. The IDP Education share price has rallied an incredible 103% higher over the last 12 months.
Jumbo Interactive Ltd (ASX: JIN)
The chief executive officer of this lottery ticket seller has sold shares on market recently. According to a change of director's interest notice, Mike Veverka converted 250,000 options for $875,000 before then selling 185,084 shares on-market for a total consideration of $3,072,125. This all took place between April 23 to April 30 and left Mr Veverka with a total of 9,656,848 shares. The Jumbo Interactive share price is up 270% over the last 12 months thanks to its stellar profit growth.
Nanosonics Ltd (ASX: NAN)
According to a change of director's interest notice, this infection control company's non-executive director, Dr David Fisher, has been selling shares on-market. The notice reveals that Dr Fisher offloaded 40,000 shares on-market for a total consideration of $182,909.68 on April 26. This sales left the director with an indirect holding of 165,516 shares and a direct holding of 248,424 shares. As with the others, the Nanosonics share price has been on fire over the last 12 months with a gain of over 90%.
