Benzinga | Mar 5, 2021 11:51AM EST

Insider Buys Plus Therapeutics Shares



Plus Therapeutics Inc (NASDAQ:PSTV) was trading 8.1% higher from the previous closing price. Hedrick Marc H filed a Form 4 with the SEC on Friday, March 5. The insider bought 2,500 shares at an average price of $2.50. After the transaction, the executive's stake in Plus Therapeutics Inc. moved to 16,397 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. If the transaction was an open-market transaction, that means that the insider made a conscious 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.