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West Alfred P Jr filed a Form 4 with the SEC on Friday, September 18. The insider sold 35,000 shares of SEI Investments Inc (NASDAQ:SEIC) at an average price of $50.06. After the transaction, the executive's stake in SEI Investments Inc. moved to 9,546,977 shares. SEI Investments was trading 1% higher from the previous closing price.
Why Insider Transactions Are Important?
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.
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. 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. 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.
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