At the end of each week I like to look at 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.
Three shares which have reported meaningful insider buying this week are listed below:
Aristocrat Leisure Limited (ASX: ALL)
A change of director's interest notice reveals that non-executive director Neil Chatfield picked up 6,000 of the gaming technology company's shares through an on-market trade for a total consideration of $144,120. This brought his holding to a total of 18,000 shares. It appears that Mr Chatfield feels the sell-off of Aristocrat Leisure's shares has been overdone, leaving them in the bargain bin. I think this is the case and believe they offer a compelling risk/reward at this level.
Coles Group Ltd (ASX: COL)
This supermarket giant's independent non-executive director, Zlatko Todorcevski, has dipped into the market for a second week in a row. According to a change of director's interest notice, Mr Todorcevski followed up on last week's on-market purchase of 8,000 shares at $12.50 per share with the purchase of 8,695 shares on-market at an average price of $11.50 per share. The director has certainly done well with the second purchase. Coles' shares have been on a tear this week thanks largely to a positive broker note out of the Macquarie equities desk. At the time of writing they are trading at $12.50.
Rio Tinto Limited (ASX: RIO)
According to a change of director's interest notice, non-executive director Michael L'Estrange AO has bought 500 of the mining giant's shares through an on-market trade at an average of $73.46 per share or a total consideration of $36,730. This purchase took the director's holding to a total of 3,103 shares. I like Rio Tinto at these prices and think it could be worth following his lead and buying shares.
