Insider buying is usually regarded as a bullish indicator. The theory goes that as few people should know a company better than its own directors, if they are buying, then it could be interpreted as a sign that things are going well and they expect those shares to appreciate in value.
Conversely, when directors sell shares, it often leads to alarm bells ringing. After all, if the director felt these shares were going to increase in value, they would be unlikely to sell them.
With that in mind, should investors be concerned by news that the CEO of a leading ASX 200 company has been selling a large number of shares again?
Which ASX 200 share reported insider selling?
According to a change of director's interest notice, the co-founder and CEO of Goodman Group (ASX: GMG) offloaded approximately $19.2 million worth of the company's shares last week.
The notice reveals that Greg Goodman sold a total of 838,993 Goodman shares through a series of on-market trades on 15 September.
Goodman received an average of $22.85 for the shares, which is just a touch shy of its multi-year high of $23.39.
Should you be concerned?
While insider selling rarely goes down well with the market, it is worth remembering that there are different levels of insider selling.
For example, when a director sells all or most of their holdings, it can be a concern. However, when a director sells shares but still retains a significant stake, it usually isn't anything to worry about.
For Goodman's CEO, it certainly is the latter. He still has plenty of skin in the game with a holding of almost 39 million Goodman shares and 3.4 million performance rights. Based on this, I think it is fair to say that few people would hate to see this ASX 200 share fall in value than him.
