Travelzoo's (NASDAQ:TZOO) stock price has dropped 10% in the previous week, but insiders who sold US$19m in stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of US$14.19 is still below the current share price.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Travelzoo Insider Transactions Over The Last Year
Notably, that recent sale by Founder & Chief Talent Officer Ralph Bartel was not the only time they sold Travelzoo shares this year. They previously made an even bigger sale of -US$2.6m worth of shares at a price of US$18.29 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$12.50. So it may not tell us anything about how insiders feel about the current share price.
In the last year Travelzoo insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
See our latest analysis for Travelzoo
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Travelzoo Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Travelzoo. Specifically, Founder & Chief Talent Officer Ralph Bartel ditched US$2.5m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 38% of Travelzoo shares, worth about US$53m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Travelzoo Tell Us?
An insider sold Travelzoo shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. On the plus side, Travelzoo makes money, and is growing profits. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example - Travelzoo has 3 warning signs we think you should be aware of.
But note: Travelzoo may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.