Tenneco Inc (NYSE:TEN) was trading 0.8% lower from the previous closing price. Icahn Carl C filed a Form 4 with the SEC on Tuesday, March 30. The insider sold 372,160 shares at $10.75 on Friday, Mar 26, sold 40,236 shares at $10.79 on Monday, Mar 29, and sold 252,608 shares at $10.79 on Tuesday, Mar 30. . After the transactions, the executive’s stake in Tenneco Inc. movedto 9,993,335 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. 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
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 conscious 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.
