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:
Credit Corp Group Limited (ASX: CCP)
This debt collector’s non-executive director, Don McLay, has been selling shares on-market again. According to a change of director’s interest notice, Torres Industries, of which Mr McLay is chairman, offloaded a further 30,000 shares through an on-market trade on May 31. This sale was made at an average price of ~$25.09 per share, which equates to a total consideration of approximately $753,000. The Credit Corp share price has been a strong performer in 2019, rising 28% since the start of the year.
Janus Henderson Group PLC (ASX: JHG)
According to a change of director’s interest notice, non-executive director, Eugene Flood, Jr, has sold the majority of his shares on-market recently. The notice reveals that Mr Flood sold 5,500 of the company’s NYSE-listed shares through an on-market trade on May 31 at an average price of US$20.49 per share. This equates to a total consideration of US$112,695 and leaves the director with a holding of just 116 shares. The non-executive director made this sale despite the Janus Henderson share price trading over 34% lower than where it was 12 months ago.
Northern Star Resources Limited (ASX: NST)
A change of director’s interest notice reveals that the executive chairman of this gold miner has reduced his hold in the company significantly. According to the notice, Bill Beament has reduced his holding in the company by 3,141,795 shares. However, this was done as part of a final family court settlement and not out of choice. The release explains that Mr Beament retains 3,141,793 Northern Star shares and 3,000,000 performance rights.
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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.