Insider buying often signals confidence in a company's future, and a few cheap ASX shares have caught investor attention recently due to notable insider activity.
This kind of buying activity can be a strong indicator of growth potential – especially when it comes from those with deep knowledge of the business. While each of these shares discussed here has faced recent challenges, the recent insider purchase could signal this belief.
Here's a look at these five cheap ASX shares being bought by insiders this week.
Image source: Getty Images
IDP Education Ltd (ASX: IEL)
IDP Education has been facing headwinds, with its share price down 23% in 2024 and 37% over the past year. Changes to student visa rules have disrupted the student placement and education company's key markets.
Despite this, non-executive director Tracey Horton bought 1,300 shares on 7 June for around $15.15 each.
Further, Citigroup also purchased around 3.27 million IDP shares in June, bringing its stake to more than 18.87 million shares, or 6.77% voting power.
Currently, the seemingly cheap ASX share is valued at $15.37 apiece, having climbed 3% into the green so far this week.
Deterra Royalties Ltd (ASX: DRR)
Deterra Royalties recently experienced a 10% drop after announcing a significant acquisition in the lithium sector.
The company noted it made a $276 million offer to UK company Trident Royalties Plc in June, equal to roughly 93 cents per share.
Despite the initial market reaction, the company's shift towards green metals looks like it's being viewed favourably by institutional investors.
Mandatory filings show The Vanguard Group starting an initial position in Deterra, purchasing 26.59 million shares of the company through its various entities.
This sees it owning 5.029% of the company as of 21 June 2024. The cheap ASX share is priced at $4.02 each at the time of writing.
BUBS Australia Ltd (ASX: BUB)
Bubs Australia has been in the headlines following strong sales growth in the United States. According to my colleague Bernd, Bubs' weekly scan revenues have surpassed US$1 million, and the company has become the top-selling infant formula product on Amazon USA.
CEO Reginald Weine is optimistic about sustained demand and future growth. On 24 June 2024, Weine acquired 50,000 shares at $0.125 each. Bubs Australia shares are currently trading at $0.128 each, down 10% in the last month.
Starpharma Holdings Ltd (ASX: SPL)
Starpharma Holdings has also faced challenges in 2024. The cheap ASX share is down nearly 47% this year and 68% in the past 12 months.
Recent filings show that as of 21 June 2024, investment fund Allan Gray reduced its voting power to 9.28% after disposing of 5.35 million shares from its position this week.
Some of this new supply looks to have been soaked up by two directors – Lynda Cheng, and Robert Thomas – who this week purchased 110,555 shares at 9 cents per share, and 200,000 ordinary shares at 8.9 cents apiece respectively.
Currently, Starpharma shares are priced at $0.087 each.
WAM Leaders Limited (ASX: WLE)
WAM Leaders has seen steady insider buying from director Geoffrey Wilson. Mr Wilson is also the chairman of listed investment company (LIC) WAM Capital Ltd (ASX: WAM).
Between 24 June and 27 June 2024, Wilson acquired over 18,000 shares. The purchases were made on market across several trades, ranging in size from $11.1 million to $15.6 million.
The investments bring Wilson's stake to 13.05 million shares in the cheap ASX share. Today, WAM Leaders is valued on market at $1.28 apiece with a trailing dividend of 9.1 cents per share.
