Insiders are buying these 3 ASX shares: Should you?

Insiders have been snapping up Greencross Limited (ASX:GXL) shares and the shares of two other companies. Is it time to invest?

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One thing that I like to see when investing in a company is directors with skin in the game. I believe this shows that their interests are aligned with shareholders.

Three companies which have recently seen a ramp up in insider buying are listed below. Is this a sign you should invest?

Galaxy Resources Limited (ASX: GXY)

Following a sharp sell-off of the lithium miners this month, no less than four directors have snapped up Galaxy shares with on market purchases. If a broker note out of Citi is to be believed, these directors have picked up shares at a bargain price. Citi recently slapped a buy rating and $2.70 price target on Galaxy's shares. I would be tempted to buy or top up a position at the current share price.

Greencross Limited (ASX: GXL)

With its shares down 21% this year, three Greencross directors have increased their holding in the veterinary and pet care retail company this month with on market purchases. With its shares changing hands at just 14x trailing earnings and touching on a 52-week low, I can't say I'm surprised to see directors acquiring shares. As I said yesterday, I think Greencross could be a good buy and hold option for investors at the current share price.

Vita Group Limited (ASX: VTG)

This operator of Telstra Corporation Ltd (ASX: TLS) retail stores has certainly had a year to forget. Its shares have fallen a whopping 74% in the last 12 months. CEO Maxine Horne has seized on this share price weakness and acquired an additional 3.2 million shares in the company at the start of the month. Whilst this could be interpreted as a big positive, until the impact of the Telstra remuneration and store network restructure is understood, I would err on the side of caution and give it a miss.

Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia owns shares of Greencross 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 Bruce Jackson.

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