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:
AGL Energy Limited (ASX: AGL)
According to a change of director's interest notice, the chief executive officer of this energy company has sold a good portion of his directly owned shares recently. The notice advises that Brett Redman offloaded 15,000 shares through an on-market trade on September 25. Mr Redman received an average of $19.0774 per share or a total consideration of approximately $286,000. This left the chief executive with 21,378 ordinary shares held directly.
MNF Group Ltd (ASX: MNF)
A change of director's interest notice reveals that one of the non-executive directors of this provider of voice, data, and cloud-based communication services has just offloaded a large number of shares on market. According to the notice, Andy Fung sold 487,383 shares for a total consideration of $2,482,171.16 through a series of on-market trades between September 25 and October 1. This equates to an average of approximately $5.09 per share. The company explained: "Mr Fung advises that following the sale of a small parcel of shares from 25th September to 1st October 2019, his total holding in MNF Group Limited has been changed from 19.20% to 18.54%. He further advises that he does not intend to sell more shares in the near term and remains positive, and is committed, to the future of MNF Group Limited."
