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:
BlueScope Steel Limited (ASX: BSL)
According to a change of director’s interest notice, this steel producer’s managing director and CEO has been selling shares. Across both September 18 and 19 Mark Vassella offloaded a total of 463,446 shares for a total consideration of $5,677,461.01. The company revealed that these sales were made primarily to meet Mr Vassella’s tax liabilities arising in FY 2018 and FY 2019 as a result of the vesting of shares under various LTIP and STIP Awards. The chief executive continues to have a relevant interest of 878,050 ordinary shares in the company.
Mirvac Group (ASX: MGR)
The managing director and CEO of this property developer, Susan Lloyd-Hurwitz, has been selling shares this month. According to the change of director’s interest notice, Lloyd-Hurwitz sold a total of 70,967 stapled securities through on-market trades on September 18 and 19 for an average of ~$3.11 or a total consideration of $220,320.28. Despite this sale, the chief executive still has a significant interest in Mirvac of 4,438,133 stapled securities and 2,513,678 performance rights.
Sonic Healthcare Limited (ASX: SHL)
This healthcare company’s executive director, Christopher Wilks, has offloaded a large number of shares through on-market trades on September 17 and 18. According to the change of director’s interest notice, Mr Wilks sold a total of 120,000 shares at an average of $27.932 per share. This works out to be a total consideration of $3,351,840. Thee release explains that these shares were sold to fund the recent exercise of options.
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