Insiders who sold Apple Inc.'s (NASDAQ:AAPL) earlier year may find some solace in the 7.1% drop

By
Simply Wall St
Published
April 12, 2022
NasdaqGS:AAPL
Source: Shutterstock

Even though Apple Inc. (NASDAQ:AAPL) has fallen by 7.1% over the past week , insiders who sold US$1.4m worth of stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of US$150 is still lower than 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Apple

The Last 12 Months Of Insider Transactions At Apple

In the last twelve months, the biggest single sale by an insider was when the Senior Director of Corporate Accounting, Chris Kondo, sold US$1.4m worth of shares at a price of US$150 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$166. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 19% of Chris Kondo's holding. Chris Kondo was the only individual insider to sell over the last year.

The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NasdaqGS:AAPL Insider Trading Volume April 12th 2022

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

Insider Ownership of Apple

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Apple insiders own about US$1.7b worth of shares (which is 0.06% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Apple Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. While we feel good about high insider ownership of Apple, we can't say the same about the selling of shares. 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. You'd be interested to know, that we found 1 warning sign for Apple and we suggest you have a look.

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, but not derivative transactions.

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