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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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare Limited. 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.