Don't Ignore The Insider Selling In Apple

Some Apple Inc. (NASDAQ:AAPL) shareholders may be a little concerned to see that the Senior Director of Corporate Accounting, Chris Kondo, recently sold a substantial US$1.0m worth of stock at a price of US$271 per share. That sale reduced their total holding by 20% which is hardly insignificant, but far from the worst we've seen.

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The Last 12 Months Of Insider Transactions At Apple

The Independent Non-Executive Chairman of the Board, Arthur Levinson, made the biggest insider sale in the last 12 months. That single transaction was for US$45m worth of shares at a price of US$229 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$272. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 4.5% of Arthur Levinson's stake.

Apple insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for Apple

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).

Insider Ownership Of Apple

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Apple insiders own 0.06% of the company, worth about US$2.6b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Apple Insiders?

Insiders sold Apple shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But since Apple is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. Every company has risks, and we've spotted 2 warning signs for Apple you should know about.

Of course Apple may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.