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Insider Buys Eaton Vance Senior Income's Stock

·2 min read

Eaton Vance Senior Income Inc (NYSE:EVF) was trading 0.3% lower from the previous closing price. Saba Capital Management, L.P. filed a Form 4 with the SEC on Tuesday, August 11. The insider bought 9,640 shares at an average price of $5.85. After the transaction, the executive's stake in Eaton Vance Senior Income Inc. moved to 7,421,953 shares.

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. 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

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 attain compensation. Moreover, transaction code C indicates the conversion of an option.

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