Benzinga | Sep 28, 2020 11:17AM EDT

Insider Buys Delaware Enhanced Global's Stock



Saba Capital Management, L.P. filed a Form 4 with the SEC on Monday, September 28. The insider bought 22,613 shares of Delaware Enhanced Global Inc (NYSE:DEX) at an average price of $8.73. After the transaction, the executive's stake in Delaware Enhanced Global moved to 1,426,601 shares. Shares of Delaware Enhanced Global rose by 1.3% 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."

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. 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.