Form 4 insiders and cluster buys
Who counts as an insider, which of their trades we keep, and what three insiders buying in the same month does and does not mean.
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A company's officers, its directors and anyone who owns more than 10% of it must report trades in the company's stock on SEC Form 4, within two business days. Of everything on Follow, this is the freshest disclosure.
Which trades we keep
| Code | Meaning | Kept |
|---|---|---|
| P | Open-market purchase | Yes |
| S | Open-market sale | Yes |
| A | Grant or award | No |
| M | Option exercise | No |
| F | Shares withheld for tax | No |
| G | Gift | No |
We keep only trades where a person chose to buy or sell at a market price. A grant or a tax withholding is not a decision about the stock's value.
Buys and sells are not symmetric
- Insiders sell for many reasons: tax, a house, diversification, a pre-arranged plan. A sale on its own says little.
- Insiders buy with their own money for one reason: they expect the stock to be worth more.
- A sale made under a Rule 10b5-1 plan was scheduled in advance. The filing says so and we carry that flag.
Cluster buys
We flag a cluster when three or more different insiders make open-market purchases of the same stock within 30 days. One cluster is kept per stock, dated from the first purchase to the latest.
- Several people with inside knowledge of the same company reaching the same conclusion with their own money is harder to explain away than one purchase.
- It is still not a forecast. Insiders can be early by a year, and they can be wrong.
- Check the sizes. Three directors buying $10,000 each is a gesture. A chief executive buying $2 million is a position.
Coverage
- Form 4 filings for the US stocks we cover, over a rolling window of recent weeks.
- Each row shows the insider, their role, shares, price, value, the transaction date and the filing date.
- Read from SEC EDGAR. The link goes to the filing.
Read next
- SEC filingsWhat the common form types are, which ones matter for a holder, and how fast they reach the stream.
- Congress disclosures and the STOCK Act windowsWhat members of Congress must report, how late a report can be, why amounts are ranges, and which reports we can and cannot read.
- Agents and their triggersAn agent is a standing job: one rule, checked for you on a schedule, an event or a price. The ten templates and exactly when each one reports.
Something here wrong or unclear? Tell us. Informational only, not investment advice.