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 a couple of shares which have recently experienced notable insider selling:
Aventus Group (ASX: AVN)
One of this retail property group’s independent non-executive directors offloaded his entire holding through a large on-market trade earlier this month. According to a change of director’s interest notice, Brett Blundy sold all 12,709,925 shares he owned for a total consideration of $34,189,698. Despite this sizeable sale, the Aventus share price has continued to push higher and is trading within a whisker of an all-time high today. No reason was provided for the director’s sale.
Domino’s Pizza Enterprises Ltd (ASX: DMP)
According to a change of director’s interest notice, the CEO of the pizza chain operator has sold a number of shares through an on-market trade this week. The notice advises that Don Meij sold 43,343 shares on September 18 at an average of $47.7892 per share. This works out to be a total consideration of almost $2.1 million.
Volpara Health Technologies Ltd (ASX: VHT)
A number of this healthcare technology company’s directors have been selling shares this month after Volpara received an unsolicited approach from a broker on behalf of several international and domestic institutions that wished to purchase shares. CEO Dr Ralph Highnam was amongst the sellers, which each offloaded approximately 12% of their respective holdings for an average of $1.60 per share. Dr Highnam advised that “the Board considered the offer and agreed that it would be beneficial for the Company and its shareholders to strengthen its institutional shareholder base and increase the proportion of stock held in free float.” Pleasingly, all the sellers still have material holdings (totalling 23% of the total issued capital), so their interests remain firmly in line with shareholders.