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:
Insurance Australia Group Ltd (ASX: IAG)
According to a change of director’s interest notice, the managing director and chief executive officer of this insurance giant has been selling shares. The notice reveals that Peter Harmer has offloaded a total of 400,000 shares through a series of on-market trades between October 31 and November 5. Mr Harmer received a total of $3,167,699 for the sales or an average of $7.92 per share. This leaves the managing director with 1,221,560 ordinary shares.
Orica Ltd (ASX: ORI)
A change of director’s interest notice reveals that the managing director and chief executive officer of this chemicals company has sold shares also. According to the notice, Alberto Calderon sold 70,000 shares through an on-market trade on November 6. Dr Calderon received an average of $23.65 per share, which equates to a total consideration of approximately $1.65 million. The company advised that these shares were “required to be sold to cover Dr Calderon’s income tax liability on the FY2017 vested Performance Rights.” The managing director still holds 221,208 ordinary shares
Redbubble Ltd (ASX: RBL)
One of this ecommerce company’s non‑executive directors has been selling shares recently. According to the notice, non-executive director and former chief executive, Martin Hosking, sold 6 million shares last week for a total consideration of $11.58 million. However, it is worth noting that even after these sales, he still owns approximately 19.6% of the growing company.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Insurance Australia Group Limited. The Motley Fool Australia has recommended REDBUBBLE FPO. 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.
- Northern Star (ASX:NST) and Saracen (ASX:SAR) shares on watch after merger update – November 25, 2020 4:49pm
- Is the Bravura Solutions (ASX:BVS) share price a buy? – November 25, 2020 4:36pm
- Why the Cann Group (ASX:CAN) share price is up 76% this week – November 25, 2020 3:18pm