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News

Insider Buys Colony Credit Real Estate's Stock

Author: Benzinga Insights | September 24, 2020 11:25am

GENERAL COUNSEL AND Palame David A filed a Form 4 with the SEC on Thursday, September 24. The insider bought 10,000 shares of Colony Credit Real Estate Inc (NYSE:CLNC) at an average price of $4.70. After the transaction, the executive's stake in Colony Credit Real Estate Inc. moved to 84,395 shares. Shares of Colony Credit Real Estate moved lower by 0.7% from the previous closing price.

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. 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 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.

Posted In: CLNC