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:
Bubs Australia Ltd (ASX: BUB)
According to a change of director's interest notice, the founder and CEO of this infant formula and baby products company has offloaded a large number of shares. Over the space of five days, Mrs Kristy Carr sold a total of 4 million shares at an average of $1.48 per share. This equates to a total consideration of $5.92 million. The company advised that Mrs Carr sold the shares entirely for personal reasons as she wishes to acquire a new family home. The CEO still owns approximately 16.8 million shares and 4.8 million unlisted performance options, making her the second largest shareholder behind C2 Capital Partners. Given her substantial holding and the reason given for the sale, I wouldn't be too alarmed by this news.
Credit Corp Group Limited (ASX: CCP)
A change of director's interest notice reveals that this debt collection company's non-executive director, Don McLay, has sold 32,500 shares through an on-market trade on May 10. Mr McLay received an average of $23.72 per share or a total consideration of $770,804. Despite the sizeable share sale, the director still has a considerable holding. This sale leaves Mr McLay with a total holding of 1,354,270 Credit Corp shares, which I would argue means his interests remain aligned with shareholders.
