Benzinga | Dec 10, 2020 11:36AM EST

Insider Sells Enterprise Financial Services Shares



*Deutsch James F. filed a Form 4 with the SEC on Thursday, December 10. The insider sold 38,957 shares of Enterprise Financial Services Inc (NASDAQ:EFSC)at an average price of $35.05. After the transaction, the executive's stake in Enterprise Finl Servs Inc. moved to 722,211 shares. Enterprise Financial Services was trading 0.4% lower from the previous closing price.

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.

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.