Benzinga | Dec 8, 2020 11:15AM EST

Insider Sells TripAdvisor's Shares



Soni Kanika filed a Form 4 with the SEC on Tuesday, December 8. The insider sold 350 shares of TripAdvisor Inc (NASDAQ:TRIP) at an average price of $28.64. After the transaction, the executive's stake in TripAdvisor Inc. moved to 10,997 shares. Shares of TripAdvisor fell by 0.8% from the previous closing price.

Why Insider Transactions Are Important?

While transactions from an insider shouldn't be used as the sole item to make an investment or trading decision, an insider buying or selling stock in their company can be a good added factor that leads to more conviction in a decision.

Insiders buying stock after a notable sell off can indicate an insider's long-term belief in the success of the company; insiders buying stock at new highs can be an indication the exec doesn't feel the stock is overvalued. Insiders who sell stock at new lows could be anticipating some capitulation moment. If the insider sells at new highs, it could point to the intention to "take some profit" and "lock in a gain."

Transaction Codes To Focus On

Investors prefer focusing on transactions which take place in the open market, indicated in the Form 4 with codes P for purchase and S for sale. An open-market transaction means the insider went into the market of their own volition and made an active decision about the potential path for a company and its stock moving forward.

Transaction codes besides P or S aren't relatively important as they are seldom tied to a decision by the executive. For example, transaction code A is indicative of an insider being forced to sell shares to attain compensation. Moreover, transaction code C indicates the conversion of an option.