Market Overview

Insider Buys Pioneer Floating Rate's Shares

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Shares of Pioneer Floating Rate Inc (NYSE:PHD) rose by 0.7% from the previous closing price. A Form 4 filing filed with the SEC on Monday, June 22 showed that Saba Capital Management, L.P. bought 303,174 shares at an average price of $9.76. The transaction moved the executive's stake in Pioneer Floating Rate Inc. to 6,124,520 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. 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

 

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

 

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