Market Overview

Insider Buys Southern National Bancorp's Shares

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Southern National Bancorp Inc (NASDAQ:SONA) was trading 0.6% lower from the previous closing price. Kabbash Charles A filed a Form 4 with the SEC on Friday, June 19. The insider bought 235 shares at an average price of $10.08. After the transaction, the executive's stake in Southern National Bancorp Inc. moved to 12,270 shares.

Why Insider Transactions Are Important?

 

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.

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. 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. An open-market transaction means the insider went into the market of their own volition and made an active decision about the potential path for a company and its 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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