Market Overview

Insider Sells SMART Global's Shares

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SMART Global Holdings (NASDAQ:SGH) shares slipped 0.38% during the regular session today. A Form 4 filing filed with the SEC on Friday, August 03 showed that Executive VP COO Pacheco Jack A sold 3,750 shares at an average price of $30.00. The transaction moved the executive's stake in SMART Glb Hldgs Inc. to 85,208 shares. 

The Importance of Insider Transactions

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

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 attaincompensation. Moreover, transaction code C indicates the conversion of an option.

 

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