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:
Fortescue Metals Group Limited (ASX: FMG)
A change of director’s interest notice reveals that one of this iron ore producer’s non-executive directors has been buying shares recently. According to the notice, Ya-Qin Zhang picked up 12,000 shares through an on-market trade on 27 August. The director paid a total of $230,040 for the shares, which equates to an average of $19.17 per share.
This was just a fraction short of its record high of $19.56, which appears to indicate that the director is confident in Fortescue’s future and sees value in its shares at the current level. And with the spot iron ore price currently fetching ~US$126 a tonne, I would have to agree. Fortescue looks likely to generate bumper free cash flows again in FY 2021. This could mean more generous dividends for shareholders. As a result, I think this could make it a great option for income investors.
Inghams Group Ltd (ASX: ING)
This poultry producer has experienced a large amount of insider buying this month. According to a series of notices, no less than five of the company’s directors have been increasing their holdings through on-market trades. The two largest purchases came from non-executive director Michael Ihlein and chairman Peter Bush.
Mr Ihlein picked up 45,455 shares on 1 September for an average of $3.29 and Mr Bush paid an average of $3.21 for 50,000 shares a day later. This represents total considerations of $149,546.95 and $160,500, respectively. Judging by these purchases, it would appear as though Inghams’ directors believe the worst is over for the company after a difficult 12 months.
These 3 stocks could be the next big movers in 2020
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.*
In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
Find out the names of our 3 Post COVID Stocks – For FREE!
*Returns as of 6/8/2020
More reading
- The best dividend shares to buy today
- Fortescue share price drops lower despite positive update
- Why you should buy ASX copper miners in this market meltdown
- Quarterly rebalance: Coles and Fortescue added to ASX 20, Zip joins the ASX 200
- The one type of ASX company that outperforms all others
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.
The post Insiders have been buying Fortescue and this ASX share appeared first on Motley Fool Australia.
from Motley Fool Australia https://ift.tt/3bnTe1s
Leave a Reply