Market Overview

Insider Sells Blue Bird's Stock

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Shares of Blue Bird Corporation (NASDAQ: BLBD) fell by 2% from the previous closing price. General Counsel & Treasurer Yousif Paul filed a Form 4 with the SEC on Friday, June 19. The insider sold 10,000 shares at an average price of $14.66. After the transaction, the executive's stake in Blue Bird Inc. moved to 15,583 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.

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

 

Wall Street tends to focus on insider transactions which take place in the open market, viewed inside a Form 4 filing via 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 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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