Quotient Inc (NASDAQ:QTNT) was trading 6.6% higher from the previous closing price. Perceptive Advisors Llc filed a Form 4 with the SEC on Wednesday, September 16. The insider bought 2,911,764 shares at an average price of $4.25. After the transaction, the executive's stake in Quotient Inc. moved to 16,200,818 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. 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."
Transaction Codes To Focus On
Wall Street tends to focus on insider transactions which take place in the open market, viewed inside a Form 4 filing via 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.