SPY323.50+0.86 0.27%
DIA268.10+0.52 0.19%
IXIC10,672.27+39.28 0.37%

Insider Buys Colony Capital's Shares

Shares of Colony Capital Inc (NYSE:CLNY) moved lower by 0.7% from the previous closing price. Hedstrom Mark M. filed a Form 4 with the SEC on Tuesday, August 18. The insider bought 25,000 shares at an average price of $2.80. After the transaction, the executiv

Benzinga · 08/18/2020 16:02

Shares of Colony Capital Inc (NYSE:CLNY) moved lower by 0.7% from the previous closing price. Hedstrom Mark M. filed a Form 4 with the SEC on Tuesday, August 18. The insider bought 25,000 shares at an average price of $2.80. After the transaction, the executive's stake in Colony Capital Inc. moved to 722,727 shares.

Why Insider Transactions Are Important?

Insider transactions shouldn't be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

When an insider buys stock after an important sell off, that can indicate the insider's faith in the success of the organization. Henceforth, if the stock is bought at new highs, it might be because the insider feels that the stock is not overvalued. Conversely, insiders who are selling stock at new lows can potentially indicate some kind of capitulation moment. Insiders selling at new highs can indicate that exec wants to "take some profit" and "lock in a gain."

Important Transaction Codes

Investors prefer focusing on transactions which take place in the open market, indicated in the Form 4 with codes P for purchase and S for sale. If the transaction was an open-market transaction, that means that the insider made a concious decision for the company's stock moving forward.

Transaction codes other than P or S are often viewed with less conviction as they are often not tied to a decision by the exec. As an example, transaction code C indicates the conversion of an option. Transaction code A indicates the insider may have been forced to sell shares in order to receive compensation the exec was promised upon being hired by a company.