Earlier this week I looked at a few shares that had experienced meaningful insider selling recently.
I'm always wary about insider selling as in some cases it could be a sign that these directors don't expect their shares to increase in value any time soon so are happy to part ways with them.
Conversely, when insiders are buying shares it is often seen as a bullish indicator as it could be a sign that they feel these shares are undervalued.
With that in mind, here are three shares that have experienced meaningful insider buying this week:
Collins Foods Ltd (ASX: CKF)
According to a change of director's interest notice, the chairman and independent non-executive director of this leading KFC franchisee has dipped into the market this week with a modest purchase of shares. The release reveals that Robert Kaye SC has picked up 1,692 shares through an on-market trade at an average price of $5.88 per share. This lifts Mr Kaye's holding to a total of 31,605 shares. I think it would be worth following Mr Kaye's lead by picking up shares. This is because I feel Collins Foods is well-positioned to deliver solid long-term earnings growth due to its European expansion.
McGrath Ltd (ASX: MEA)
A change of director's interest notice reveals that chairman Peter Lewis has been buying shares on-market in recent days. In two separate on-market trades, Mr Lewis picked up a total of 50,000 shares of the real estate company. The shares cost a total of $17,000 or 34 cents per share. Earlier this week McGrath's shares tumbled to a 52-week low of 33 cents and to a level that this director appears to think is good value.
Smartgroup Corporation Ltd (ASX: SIQ)
Managing director and chief executive officer, Deven Billimoria, has topped up his considerable holding in this salary packaging and fleet management company this week. According to a change of director's interest notice, Mr Billimoria picked up 8,997 shares through an on-market trade for a total consideration of $108,233.91 or $12.03 per share. This brought his holding to a total of 4,052,764 shares. Billimoria appears to have seized on recent share price weakness to top up his holding.
