On Monday the Costa Group Holdings Ltd (ASX: CGC) share price started the week on a disappointing note.
Despite the market pushing higher, the horticulture company's shares closed the day around 1.5% lower at $5.21.
Why did Costa's shares drop lower?
The reason for this share price weakness appears to be a change of director's interest notice that was filed yesterday afternoon.
According to the notice, the company's chief executive officer, Harry Debney, has been selling shares on-market this month.
Mr Debney offloaded 825,000 ordinary shares through on-market trades on March 11 and March 12 for an average of $5.28 per share or a total consideration of $4.36 million.
Then on March 15 the CEO exercised 616,944 new CEO options for an average of $2.81 per share or a total of $1.73 million.
Costa advised that Mr Debney sold the shares "for the purposes of funding the exercise of options" and "to meet income tax obligations, namely from the 2017/18 year for exercising two tranches of options and associated share sales."
Mr Debney still has an interest of 1,149,270 shares (directly and indirectly) after these sales.
Should you be concerned?
Whilst insider selling is often considered a bearish indicator, I don't think these sales are anything to worry about.
Especially given how its independent non-executive director, Tim Goldsmith, was buying shares on the day that Mr Debney was selling his. Mr Goldsmith picked up 10,000 shares at $5.39 per share on March 11.
Should you invest?
In its last update management revealed improved trading conditions and a solid recovery in the price of its produce. This led to the company reaffirming its guidance for earnings growth of at least 30% in calendar year 2019.
So with its shares changing hands at around 22x estimated FY 2019 earnings, I think Costa's shares are fairly priced and could be a good long-term option for investors.
Elsewhere, insiders have also been selling the shares of Hub24 Ltd (ASX: HUB) and Ramsay Health Care Limited (ASX: RHC) this month.
