Every so often, 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:
Appen Ltd (ASX: APX)
According to a change of director’s interest notice, one of this artificial intelligence services company’s directors has been buying shares. The notice reveals that Ms Vanessa Liu picked up 1,000 shares for $25.00 per share or a total consideration of $25,000 on 24 December 2020 through an on-market trade. These were the first shares that Ms Liu has bought since joining the company in March of last year. The independent non-executive director’s buy price represents a 43% discount to Appen’s 52-week high.
One leading broker that would approve of this purchase is Citi. Last month the broker put a buy rating and $32.60 price target on the company’s shares following its trading update.
TechnologyOne Ltd (ASX: TNE)
Another change of director’s interest notice reveals that one of this enterprise software provider’s directors has been topping up their position. According to the notice, non-executive director Peter Ball bought 3,900 shares through an on-market trade on 13 January. Mr Ball paid a total consideration of $30,179.45, which equates to an average of $7.74 per share. This lifted the director’s holding to a total of 21,900 shares.
With the TechnologyOne share price trading 25% lower than its 52-week high, it appears as though this director feels its shares have fallen into the buy zone. One leading broker that certainly thinks this is the case is Morgans. Its analysts currently have an add rating and $9.99 price target on the company’s shares.