Market Overview

Insider Buys Acorn Energy Shares

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Acorn Energy Inc (OTC:ACFN) was trading flat from the previous closing price. A Form 4 filing filed with the SEC on Tuesday, June 30 showed that President and Loeb Jan H bought 198,408 shares at $0.22 on Friday, Jun 26, and bought 47,500 shares at $0.22 on Tuesday, Jun 30.The transaction moved the executive's stake in Acorn Energy Inc. to 1,809,830 shares.

The Importance of Insider Transactions

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."

Transaction Codes To Focus On

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 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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