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Insider Buys Celldex Therapeutics's Stock

Benzinga Insights
·2 min read

Celldex Therapeutics Inc (NASDAQ:CLDX) was trading 3% higher from the previous closing price. SVP of Corp Affairs & Admin Cavanaugh Sarah filed a Form 4 with the SEC on Thursday, June 11. The insider bought 1,050 shares at an average price of $4.83. After the transaction, the executive's stake in Celldex Therapeutics Inc. moved to 1,367 shares.

The Importance of Insider Transactions

While transactions from an insider shouldn't be used as the sole item to make an investment or trading decision, an insider buying or selling stock in their company can be a good added factor that leads to more conviction in a 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."

Transaction Codes To Focus On

Investors prefer focusing on transactions which take place in the open market, indicated in the Form 4 with 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 attaincompensation. Moreover, transaction code C indicates the conversion of an option.

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