Insider buying is often regarded as a bullish indicator. This is because few people should know a company better than its own directors.
The theory is that if they have the confidence to buy shares, it could be a sign that things are going well and they expect them to appreciate in value.
Conversely, when directors sell shares, it is often regarded as a bearish signal. After all, you’d be unlikely to sell shares if you thought they were about to increase in value.
With that in mind, this morning Commonwealth Bank of Australia (ASX: CBA) revealed that an insider has been selling some of the banking giant’s shares.
What did CBA announce?
According to a change of director’s interest notice from this morning, CBA Chief Executive Officer (CEO), Matt Comyn, has been trimming down his holding this week.
The notice reveals that Mr Comyn sold a total of 13,520 shares through an on-market trade on Tuesday 15 March 2022. This represented 21.2% of Comyn’s direct interest in the bank, reducing his direct holding down to 50,003 shares.
The leader of Australia’s largest bank received an average of $103.40 per share, which equates to a total consideration of approximately $1.4 million.
Time to panic?
While the CBA share price has rallied hard and is trading within touching distance of its record high, it may be unwise to panic.
After all, Comyn still has a sizeable direct holding of CBA shares with a market value of ~$5.3 million. In addition, the CEO has a hefty indirect holding of 32,084 shares and countless performance rights that could vest in the coming years.
This, you could argue, means that the CEO’s interests remain firmly aligned with shareholders’ interests.
The post CBA (ASX:CBA) share price on watch as CEO sells $1.4m of shares appeared first on The Motley Fool Australia.
Should you invest $1,000 in CBA right now?
Before you consider CBA, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and CBA wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of January 13th 2022
More reading
- ASX 200 shares open with a bang following US interest rate rise
- The CBA share price has soared 8% in a week. What’s happening?
- Why ASX 200 bank shares are storming higher today
- The CBA (ASX:CBA) share price has gone nowhere in 10 months… time to buy?
- Top brokers name 3 ASX shares to sell next week
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/vfZWiFs
Leave a Reply