Energy Recovery Director Trades Company's Stock

Pamela Tondreau, Director at Energy Recovery ERII, reported a large insider buy on November 9, according to a new SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Thursday showed that Tondreau purchased 8,350 shares of Energy Recovery. The total transaction amounted to $149,540.

Energy Recovery shares are trading up 3.29% at $18.55 at the time of this writing on Thursday morning.

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Why Insider Transactions Are Important

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 officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. 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 Energy Recovery's Insider Trades.

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