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:
Citadel Group Ltd (ASX: CGL)
A change of director’s interest notice reveals that non-executive director Jayne Shaw has been buying this information management company’s shares. The notice shows that Ms Shaw picked up a total of 50,500 shares through two on market trades on 24 June and 25 June. The director paid a total of $167,193.18, which equates to an average of $3.31 per share. This purchase almost doubled Ms Shaw’s holding to a total of 100,000 shares.
With the Citadel share price down 40% from its 52-week high, it appears as though this director sees value in its shares at the current level. Interestingly, Citadel has been very quiet during the pandemic and hasn’t provided any trading updates. This could be an indication that it is on track to achieve its guidance. Citadel is expected to deliver revenue and EBITDA growth in FY 2020, supported by low double-digit organic revenue growth.
Collins Foods Ltd (ASX: CKF)
According to a change of director’s interest notice, one of this quick service restaurant operator’s directors has been buying shares on market. The notice reveals that Collins Foods chairman and independent non-executive director, Robert Kaye SC, has topped up his position. The chair picked up 3,125 shares for a total consideration of $29,861.90. This equates to an average of $9.55 per share and brought his holding to a total of 18,444 shares.
It appears as though this director is confident that Collins Foods will deliver another solid result in FY 2021. Last month the company released its full year results and revealed an 8.9% increase in revenue to $981.7 million and a 5.1% lift in underlying net profit after tax to $47.3 million. This was despite some of its stores being closed because of the pandemic.
- 3 of the best mid cap ASX shares you can buy right now
- Insiders have been buying TechnologyOne and this ASX 200 share
- 5 things to watch on the ASX 200 on Wednesday
- These were the 5 best performing ASX shares last week
- The latest ASX stocks to be upgraded by brokers to “buy”
Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia has recommended Citadel Group Ltd and Collins Foods 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.