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Insider Buys Eaton Vance Floating-Rate Income Trust Stock

Benzinga Insights
·2 min read

Saba Capital Management, L.P. filed a Form 4 with the SEC on Friday, October 23. The insider bought 14,579 shares of Eaton Vance Floating-Rate Income Trust (NYSE: EFT) at $12.75 on Wednesday, Oct 21, and bought 249,365 shares at $12.78 on Thursday, Oct 22. . After the transactions, the executive's stake in Eaton Vance Floating-rate Inc. movedto 4,597,489 shares. Shares of Eaton Vance Floating-Rate Income Trust moved higher by 0.2% from the previous closing price.

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.

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. 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. 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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