Benzinga | Sep 25, 2020 11:25AM EDT

Insider Buys Tejon Ranch Shares

Towerview Llc filed a Form 4 with the SEC on Friday, September 25. The insider bought 13,403 shares of Tejon Ranch Inc (NYSE:TRC) at $13.53 on Wednesday, Sep 23, and bought 1,297 shares at $13.48 on Thursday, Sep 24. . After the transactions, the executive's stake in Tejon Ranch Inc. movedto 3,781,203 shares. Tejon Ranch was trading 1.4% higher 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.

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 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.