Earlier today I looked at a couple of shares that have experienced a spot of insider selling this month. Now, I’m going to turn my focus to insider buying.
I like to regularly take a look to see which shares have experienced meaningful insider buying.
This is because it 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:
Cochlear Limited (ASX: COH)
A change of director’s interest notice reveals that one of this hearing solutions company’s non-executive directors has been topping up his position. According to the notice, Prof Bruce Robinson, AC picked up 75 shares through an on-market trade on 3 September. Professor Robinson paid an average of $194.68 per share, which equates to a total consideration of $14,601. This lifts the director’s holding to a total of 1,083 shares.
With the Cochlear share price down 24% from its 52-week high, it appears as though this director sees value in them at the current level. One broker that agrees is Morgan Stanley. Last week it put an overweight rating and $229.00 price target on Cochlear shares.
TPG Telecom Ltd (ASX: TPG)
According to a change of director’s interest notice, one of this telco giant’s non-executive directors has made a large purchase of shares this month. The notice reveals that Arlene Tansey picked up 10,000 shares through an on-market trade on 7 September. Ms Tansey paid a total of $76,376.30 for the parcel of shares, which equates to an average of ~$7.64 per share. This purchase doubled the director’s holding to 20,000 shares.
The TPG share price has been on a downward trajectory since its merger with Vodafone Australia. Today it is trading 17.5% lower than the price it was commanding on 30 June following its completion. It appears as though this director believes this has brought its shares down to an attractive level. Morgan Stanley would agree with this as well. Late last month it put an overweight rating and $10.00 price target on TPG’s shares.
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More reading
- 2 ASX shares I would buy again and one I regret
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- Brokers name 3 ASX shares to buy right now
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. 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.
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