Market Overview

Insider Buys TRACON Pharmaceuticals Shares

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A Form 4 filing filed with the SEC on Tuesday, September 8 showed that President and Theuer Charles bought 5,000 shares of TRACON Pharmaceuticals Inc (NASDAQ:TCON) at an average price of $2.55. The transaction moved the executive's stake in TRACON Pharmaceuticals Inc. to 181,882 shares. Shares of TRACON Pharmaceuticals fell by 6% 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.

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. 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 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.

 

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