Insiders Sold US$9.7m Of Travelzoo Stock Possibly Sending Warning Sign

Despite the fact that Travelzoo (NASDAQ:TZOO) stock rose 11% last week, insiders who sold US$9.7m worth of stock in the previous 12 months are likely to be better off. Selling at an average price of US$12.85, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Travelzoo

The Founder & Chief Talent Officer, Ralph Bartel, made the biggest insider sale in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$13.15 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$7.56). So it may not shed much light on insider confidence at current levels.

Insiders in Travelzoo didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for Travelzoo

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insiders At Travelzoo Have Sold Stock Recently

The last three months saw significant insider selling at Travelzoo. In total, Founder & Chief Talent Officer Ralph Bartel dumped US$743k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership Of Travelzoo

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 35% of Travelzoo shares, worth about US$29m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Travelzoo Insider Transactions Indicate?

An insider sold Travelzoo shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. 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. In terms of investment risks, we've identified 4 warning signs with Travelzoo and understanding these should be part of your investment process.

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.