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:
Credit Corp Group Limited (ASX: CCP)
According to a change of director's interest notice, this receivables company's non-executive chairman has been selling shares again. The notice reveals that Don McLay sold 18,391 (indirectly owned) shares on October 2 through an on-market trade. Mr McLay received ~$30.16 per share or a total consideration of approximately $555,000. This is the latest in a series of shares sales by the non-executive chairman this year.
Pacific Smiles Group Ltd (ASX: PSQ)
A change of director's interest notice reveals that this dental centre operator's non-executive director, Dr Alex Abrahams, has sold a large number of shares once again. In June Dr Abrahams offloaded 2 million shares at an average of $1.125 per share. And then in September a further 500,000 shares were sold at $1.50 per share. This time around on October 2 the executive sold 2 million shares on-market at $1.50 per share. This equates to a total consideration of $3 million. The notice reveals that these shares were disposed of by Dr Abrahams' spouse.
Phoslock Environmental Technologies Ltd (ASX: PET)
This week this water technologies and solutions provider announced that two of the company's Chinese directors have offloaded shares following an approach by "a well-respected Australian institutional investor looking to purchase a meaningful stake" in the company. Mr Zhigang Zhang and Mr Ningping Ma sold $2,206,714 and $7,865,150 worth of shares, respectively, on October 3. Deputy Chairman Mr Zhigang Zhang commented: "Following this sale there is no intention to sell further shares while the Company pursues increased global traction for its products."
