Anil Seetharam, Board Member at Advanced Drainage Systems (NYSE:WMS), reported a large insider sell on September 8, according to a new SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Friday showed that Seetharam sold 171,474 shares of Advanced Drainage Systems. The total transaction amounted to $21,785,072.

Advanced Drainage Systems shares are trading down 2.07% at $123.36 at the time of this writing on Friday morning.

Now trade stocks online commission free with Charles Schwab, a trusted and complete investment firm.

The Importance of Insider Transactions

Insider transactions shouldn't be used primarily to make an investing decision, however, they can be an important factor for an investor to consider.

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.

Transaction Codes To Focus On

Check Out The Full List Of Advanced Drainage Systems's Insider Trades.

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