A Form 4 filed with the SEC on Wednesday September 23 showed Kelsey Gary E had purchased 2,100 shares of Juniata Valley Financial Inc (OTC: JUVF) at an average price of $ 17.35. The transaction brought the executive’s stake in Juniata Valley Financial Inc. to 15,086 shares. Juniata Valley Financial shares were unchanged from the previous closing price.
Why are insider trading important?
While an insider’s trading should not be used as the sole element in making an investment or trading decision, an insider buying or selling shares in their company can be a good additional factor that leads to greater conviction. in a decision.
When an insider buys stocks after a major sale, it can indicate the insider’s confidence in the success of the organization. Now, if the stock is bought at new highs, it may be because the insider believes the stock is not overvalued. Conversely, insiders selling stocks at new lows can potentially indicate some sort of capitulation moment. Insiders selling to new highs may indicate that the executive wants to “take a profit” and “lock in a gain”.
Important transaction codes
Wall Street tends to focus on insider trading that takes place in the open market, seen in a Form 4 via codes P for the purchase and S for sale. A transaction in the open market means that the insider entered the market of their own accord and made an active decision about the potential course of a company and its actions for the future.
Transaction codes other than P Where S are often viewed with less conviction because they are often unrelated to an executive decision. For example, the transaction code VS indicates the conversion of an option. Transaction code A indicates that the insider may have been forced to sell shares in order to receive compensation that was promised to him when he was hired by a company.