We recently reported on the companies that had the highest number of underlying put options on them among hedge funds we track. Apple Inc. (NASDAQ:AAPL) landed in fifth on that list, which could be surprising to some given the general bullish sentiment that still surrounds Apple among investors and analysts. However it’s not so when you factor in some of the many reasons a fund could have underlying put options on a company. As such, it didn’t give us a very clear picture of the situation, though we concluded that the underlying put options were mostly hedges and not bearish sentiment.
There’s another method of analysis we can use now to add an additional layer of data to our image of Apple in an effort to make it clearer, and that is insider trading activity. Studies that have shown that there is a correlation between insider trading and the short-to-medium term performance of a stock. While the correlation is higher for insider buying (which can really only indicate bullishness) versus insider selling (which could be carried out for a variety of reasons that don’t necessarily imply bearishness), both are still useful metrics to consider when trying to paint an overall picture of the prospects of a company and its shares, which is why we consider insider trading data when reporting on many of our stories.
What do we see with Apple Inc. (NASDAQ:AAPL) in terms of insider buying and selling? Well, not a lot of buying, and a lot of selling. In fact it’s been over two years now since an Apple insider made a purchase of stock, dating back to November 2012 when Walt Disney Co (NYSE:DIS) CEO and Apple Director Bob Iger purchased 1,780 shares at an average of about $563 while Apple was in the midst of a large downswing from its record high of $700 a couple of months earlier (before the company’s 7:1 stock split last summer). It was another full year prior to that to find the previous instance of insider buying, as Iger again purchased shares, 3,070 to be exact, for about $370.00.
On the other hand, insider selling activity has been quite large in recent months. Most recently, on February 18, Apple Director Andrea Jung sold 40,000 shares for $5.13 million, at $128.13 each. That was the majority of Jung’s position, leaving her with 14,595 shares. Prior to that, Senior Vice President Daniel Riccio sold his entire stake of 7,608 shares in five separate transactions between November 20, 2014, and January 23, 2015. Also in late November, Senior Vice President Craig Federighi sold off 81,543 shares in two transactions, about 25% of his Apple holdings.