Market Overview

Insider Sells Amplify Energy Stock

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A Form 4 filing filed with the SEC on Friday, November 27 showed that Fir Tree Capital Management Lp sold 271,908 shares of Amplify Energy Corp (NYSE:AMPY) at $1.06 on Tuesday, Nov 24, and sold 178,794 shares at $1.09 on Wednesday, Nov 25.The transaction moved the executive's stake in Amplify Energy to 8,912,113 shares. Shares of Amplify Energy fell by 1.70% 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 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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