Chief Accounting Officer at Cardinal Health Exercises Options Worth $985K

Mary Scherer, Chief Accounting Officer at Cardinal Health CAH, reported a large exercise of company stock options on August 21, according to a new SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Monday showed that Scherer, Chief Accounting Officer at Cardinal Health, a company in the Health Care sector, just exercised stock options worth 11,460 shares of CAH stock with an exercise price of $75.36.

Cardinal Health shares are trading down 1.08% at $86.0 at the time of this writing on Tuesday morning. Since the current price is $86.0, this makes Scherer's 11,460 shares worth $985,560.

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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 Cardinal Health's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.