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:
Independence Group NL (ASX: IGO)
According to a change of director's interest notice, this nickel producer's managing director and CEO has been selling shares on-market this month. The notice reveals that Peter Bradford offloaded a total of 354,000 shares for an average of $6.44 per share on September 10. This equates to a total consideration of ~$2.28 million. Following the sale, the company's CEO is left with 646,000 shares, 485,142 performance rights, and 93,088 service rights. Earlier this week Independence Group's shares reached a multi-year high of $6.58 thanks to a spike in the nickel price this month following an export ban in Indonesia.
Pro Medicus Limited (ASX: PME)
Earlier this month this fast-growing healthcare technology company revealed that two of its founders had sold 1 million of the company's shares each. Executive director Anthony Hall and CEO Sam Hupert sold the shares through an underwritten block trade for a total of $36.1 million each. Whilst the market responded very negatively to the news, it is worth noting that the company advised of these planned sales all the way back in February 2018.
REA Group Limited (ASX: REA)
This property listings company's former CEO and current non-executive director, Tracey Fellows, has been selling shares this month. According to a change of director's interest notice, Tracey Fellows sold a total of 9,100 shares through an on-market trade on September 5. The director received a total consideration of $956,428, which equates to an average of $105.10 per share. This sale cut her holding down by 55% to 7,386 shares.
