Kaplan Myron filed a Form 4 with the SEC on Tuesday, February 25. The insider bought 15,300 shares of CorMedix Inc. (AMEX:CRMD) at an average price of $4.27. After the transaction, the executive's stake in CorMedix moved to 150,034 shares. CorMedix was trading 3% lower from the previous closing price.
The Importance of Insider Transactions
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. Insiders who sell stock at new lows could be anticipating some capitulation moment. If the insider sells at new highs, it could point to the intention 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 besides P or S aren't relatively important as they are seldom tied to a decision by the executive. For example, transaction code A is indicative of an insider being forced to sell shares to attain compensation. Moreover, transaction code C indicates the conversion of an option.