Molecular Templates Inc (NASDAQ:MTEM) was trading 11.6% higher from the previous closing price. A Form 4 filing filed with the SEC on Wednesday, November 11 showed that Biotech Target N V bought 80,000 shares at $9.05 on Monday, Nov 09, and bought 80,000 shares at $9.16 on Tuesday, Nov 10.The transaction moved the executive's stake in Molecular Templates Inc. to 5,855,331 shares.
Why Insider Transactions Are Important?
While transactions from an insider shouldn't be used as the sole item to make an investment or trading decision, an insider buying or selling stock in their company can be a good added factor that leads to more conviction in a 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
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 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.