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:
IOOF Holdings Limited (ASX: IFL)
According to a change of director’s interest notice, one of this financial services company’s independent non-executive directors has been buying shares this week. The notice reveals that John Selak has picked up a total of 45,000 shares through an on-market trade on 1 October. Mr Selak paid a total consideration of $140,850.00, which equates to an average of $3.13. This purchase almost doubled the director’s holding to 100,000 shares.
With the IOOF share price down by more than 56% since the start of the year, it appears as though this director sees value in its shares at the current level. One broker that would agree is Ord Minnett. Last month it upgraded IOOF’s shares to a buy rating with a $4.15 price target.
Jumbo Interactive Ltd (ASX: JIN)
A change of director’s interest notice reveals that this online lottery ticket seller’s new chair has bought her first shares since joining the company in September. According to the notice, Susan Forrester AM bought 7,500 shares through an on-market trade on 30 September. Forrester paid a total of $97,500 for the shares, which works out to be an average of $13.00 per share.
Unfortunately, since this purchase the Jumbo share price has come under pressure and is now down at $11.92. Though, it might not be down there for long. Yesterday, analysts at Morgan Stanley put an overweight rating and $14.30 price target on Jumbo’s shares.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive 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.
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