In this article, I will feature one consumer goods company that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:
- The stock was sold by three or more insiders within one month.
- The stock was not purchased by any insiders in the month of intensive selling.
- At least two sellers decreased their holdings by more than 10%.
Apple (NASDAQ:AAPL) designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players worldwide.
Insider selling during the last 30 days
Here is a table of Apple's insider-trading activity during the last 30 days by insider.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Luca Maestri||VP||Nov 5||2,490||Yes||0 shares||100%|
|Daniel Riccio||SVP||Oct 31||1,997||Yes||1,996 shares||50.0%|
|Jeffrey Williams||SVP||Oct 16||1,843||Yes||
There have been 6,330 shares sold by insiders during the last 30 days. More details about the Rule 10b5-1 trading plan can be found from this link.
Insider selling by calendar month
Here is a table of Apple's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 240,600 shares sold and there have been zero shares purchased by insiders this year.
Apple reported the fiscal 2013 full-year, which ended September 28, financial results on October 28 with the following highlights:
|Net income||$37.0 billion|
|Cash and investments||$146.8 billion|
On October 28, Apple provided the following guidance for its fiscal 2014 first quarter:
|Gross margin||36.5-37.5 percent|
|Operating expenses||$4.4-$4.5 billion|
Apple has the second-highest P/S ratio among these four companies.
Here is a table of these competitors' insider-trading activities during the last six months.
|Company||Insider buying / shares||Insider selling / shares|
Google has also seen intensive insider selling during the past 30 days.
There have been three different insiders selling Apple and there have not been any insiders buying Apple during the past 30 days. All three of these insiders decreased their holdings by more than 10%. Apple has an insider ownership of 0.04%. The three last times that Apple saw intensive insider selling was in August 2013, July 2013, and April 2012.
Apple is trading at a P/E ratio of 13.00 and a forward P/E ratio of 10.85. Apple has a book value of $136.65 per share and the stock has a dividend yield of 2.38%.
Before entering short the Apple stock, I would like to get a bearish confirmation from the Point and Figure chart. The main reason for the proposed short entry is the intensive insider selling activity.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.