Benzinga | Apr 15, 2021 11:15AM EDT

Insider Buys Landec Stock



Shares of Landec Inc (NASDAQ:LNDC) moved higher by 5% from the previous closing price. Wynnefield Partners Small Cap Value Lp I filed a Form 4 with the SEC on Thursday, April 15. The insider bought 165,564 shares at $10.02 on Monday, Apr 12, and bought 2,508 shares at $10.09 on Tuesday, Apr 13. . After the transactions, the executive's stake in Landec Inc. movedto 1,743,034 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. 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."

Important Transaction Codes

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. 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.