Shares of TripAdvisor Inc. (TRIP) moved up nearly 8% touching a high of $76.97, before closing a notch lower at $76.68, after its CEO Stephen Kaufer revealed his latest investment in the company.
A document filed with the SEC disclosed the purchase of 13,785 shares of the company’s stock in a transaction on Nov 26. The shares were bought by Kaufer at a cost of $72.55 per share, for a total amount of $1,000,101.75. Following the acquisition, Kaufer now owns 283,669 shares in the company, valued at approximately $20,580,186.
Stephen Kaufer is the co-founder, President and CEO of TripAdvisor. The investment reflects his confidence in the company and is indicative of its growth prospects.
TripAdvisor has developed into a massive travel site offering user-generated reviews about hotels, activities and restaurants around the world, making it a go-to source for many looking for a vacation.
Kaufer may have become bullish on his company but the stock has seen some serious volatility of late. The stock has been down over 10% in the past one-month time frame primarily due to weak third quarter results where the bottom line significantly missed the Zacks Consensus Estimate.
TripAdvisor hasn’t had a very good track record of late, missing estimates as often as it beats them. Even recent estimate revision activity for the Zacks Rank #5 (Strong Sell) stock reveals that the estimates for the full year have gone down.
Over the long term, TripAdvisor is well positioned for growth, given its expanding user base, improving margins and increasing monetization of social and mobile platforms. However, lack of visibility and increasing competition from Priceline (PCLN), Expedia (EXPE) and Orbitz Worldwide (OWW) remain concerns.
May be there is a turnaround slated for the company in the future, but for now, we prefer to avoid the stock.
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