Once a week I like to take a look to see 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.
A number of shares have reported meaningful insider buying this week. Here are a couple which have caught my eye:
AMA Group Ltd (ASX: AMA)
One of this smash repair company’s non-executive directors has taken advantage of a significant pullback in the AMA Group share price to purchase shares. According to a change of director’s interest notice, Non-Executive Director Simon Moore picked up 1,125,000 shares through an on-market trade on 5 June. Mr Moore paid a total of $744,412.50 for the shares, which equates to an average of ~66.2 cents per share.
AMA Group’s shares fell heavily earlier this year after the release of a very disappointing half year result. Despite posting a 32% increase in half year revenue, the company delivered a loss after tax of $11 million. This compares to a profit of $10 million in the prior corresponding period. Judging by the sizeable purchase, it appears as though this director is confident that the worst is behind the company now.
Wesfarmers Ltd (ASX: WES)
According to another a change of director’s interest notice, one of this conglomerate’s non-executive directors has been topping up their holding. The notice reveals that Sharon Warburton bought 4,600 shares through an on-market trade on 9 June. Warburton paid an average of $41.75 per share, which equates to a total consideration of $192,050.
The director’s buy price was a discount of approximately 12% to Wesfarmers’ 52-week high of $47.42. It appears as though they see value at this level, especially given the strong performance of its Bunnings and Officeworks businesses during the pandemic.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers 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.