We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in
TripAdvisor, Inc. (NASDAQ:TRIP).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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The Last 12 Months Of Insider Transactions At TripAdvisor
President of Experiences & Rentals Dermot Halpin made the biggest insider sale in the last 12 months. That single transaction was for US$1.1m worth of shares at a price of US$42.49 each. That means that even when the share price was below the current price of US$55.76, an insider wanted to cash in some shares. While sellers have a variety of reasons for selling, this isn’t particularly great to see. As a general rule we consider it to be discouraging when insiders are selling below the current price. We note that the biggest single sale was 100% of Dermot Halpin’s holding. Dermot Halpin was the only individual insider to sell shares in the last twelve months.
You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will
not want to miss this
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 0.5% of TripAdvisor shares, worth about US$34m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At TripAdvisor Tell Us?
It doesn’t really mean much that no insider has traded TripAdvisor shares in the last quarter. Still, the insider transactions at TripAdvisor in the last 12 months are not very heartening. But it’s good to see that insiders own shares in the company. Of course,
the future is what matters most. So if you are interested in TripAdvisor, you should check out this
TripAdvisor may not be the best stock to buy. So take a peek at this
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at [email protected].
Source : https://finance.yahoo.com/news/worried-insider-transactions-tripadvisor-inc-135851137.html