I like to keep a close eye on which shares have experienced meaningful insider buying.
This is because insider buying is often regarded as a bullish indicator, as few people know a company and its intrinsic value better than its own directors. Which is arguably increasingly important given the recent market selloff.
A number of shares have reported meaningful insider buying this week. Here are three which have caught my eye:
Dicker Data Ltd (ASX: DDR)
According to the change of director's interest notice, the chief operating officer of this leading distributor of information technology products has been adding to his position. The notice reveals that Vladimir Mitnovetski picked up 10,000 shares through an on-market trade on April 22. Mr Mitnovetski paid an average of $5.90 per share, which equates to a total consideration of $59,000. This takes the executive's holding to a total of 826,961 shares. The Dicker Data share price is down 23% from its 52-week high. This executive appears to believe this leaves them undervalued.
Star Entertainment Group Ltd (ASX: SGR)
A change of director's interest notice reveals that one of this casino and resort operator's non-executive directors has been buying shares this week. According to the notice, Gerard Bradley bought 15,000 shares through an on market trade on April 22. Mr Bradley paid a total of $35,056.50, which works out to be an average of ~$2.34 per share. This lifted the director's holding to a total of 75,000 shares. Star Entertainment's shares have been hammered during the coronavirus. So much so, Mr Bradley's buy price represents a discount of 52% to its 52-week high.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
The chairman of this investment house has been taking advantage of recent share price weakness to increase his stake in the company. A change of director's interest notice reveals that Robert Millner (along with non-executive director Thomas Millner) has picked up 95,000 shares through on market trade on April 16 and 17. The two Millners paid a total consideration of $1,784,077, which equates to $18.78 per share. This lifted their combined indirect holding to 19,492,941 shares. The Soul Patts share price has continued to tumble since then and is now changing hands at $17.25. This is 29% lower than its 52-week high.
