Market Overview

Insider Buys Jerrick Media's Stock

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Jerrick Media Holdings Inc (OTC:JMDA) was trading unchanged from the previous closing price. A Form 4 filing filed with the SEC on Tuesday, August 11 showed that CHIEF EXECUTIVE OFFICER Frommer Jeremy bought 200 shares at $3.60 on Wednesday, Jun 24, bought 200 shares at $3.95 on Thursday, Jun 25, bought 200 shares at $4.35 on Monday, Jun 29, bought 60 shares at $4.70 on Tuesday, Jul 07, bought 100 shares at $4.75 on Wednesday, Jul 08, bought 180 shares at $4.75 on Thursday, Jul 09, bought 400 shares at $4.22 on Monday, Jul 20, bought 500 shares at $4.00 on Tuesday, Jul 21, and bought 100 shares at $3.98 on Wednesday, Jul 22.The transaction moved the executive's stake in Jerrick Media Holdings Inc. to 903,358 shares.

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.

Insiders buying stock after a notable sell off can indicate an insider's long-term belief in the success of the company; insiders buying stock at new highs can be an indication the exec doesn't feel the stock is 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 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.

 

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