Notable Zai Lab Insider Trades $1.45 Million In Company Stock

Tao Fu, President And COO at Zai Lab ZLAB, made a large buy and sell of company shares on September 15, according to a new SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission states that Tao Fu purchased 10,000 Zai Lab shares at a price of $18.92 per share for a total of $189,200 on September 15. They then sold their shares on the same day in the open market. They sold at prices ranging from $124.98 to $133.07 to raise a total of $1,265,778 from the stock sale.

Following the transaction, Fu still owns 315,100 shares of Zai Lab worth $38,999,927.

Zai Lab shares are trading down 2.07% at $123.77 at the time of this writing on Friday morning.

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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.

In legal terms, an "insider" refers to any shareholder who owns at least 10% of a company. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Important Transaction Codes

Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates the insider may have been forced to sell shares in order to receive compensation that had been promised upon being hired by the company.

Check Out The Full List Of Zai Lab's Insider Trades.