Chief Executive Officer of Methode Electronics Makes $506K Buy

Donald W Duda, Chief Executive Officer at Methode Electronics MEI, reported a large insider buy on September 25, according to a new SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Monday showed that Duda purchased 23,245 shares of Methode Electronics. The total transaction amounted to $506,636.

Methode Electronics shares are trading up 3.27% at $22.72 at the time of this writing on Tuesday morning.

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The Importance of Insider Transactions

Insider transactions shouldn't be used primarily to make an investing decision, however, they can be an important factor for an investor to consider.

In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Transaction Codes To Focus On

Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates the insider may have been forced to sell shares in order to receive compensation that had been promised upon being hired by the company.

Check Out The Full List Of Methode Electronics's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.