The head cheese at Disney (DIS 0.81%) is at it again.
Bob Iger, the CEO of All Things Mouse, has purchased another $1 million of Apple's (AAPL 1.09%) shares. Iger was added to Apple's board of directors last November, making this his second Apple purchase in less than a year.
According to conventional Wall Street wisdom, insiders sell for a number of reasons, but they buy for only one. It must mean that Apple is about to announce something revolutionary! Could a real-life Apple HDTV be on the horizon?
A little perspective, please
It's probably never a good idea to trust Wall Street "wisdom." It's been designed to make you sound savvy and intelligent, but in reality, it lacks substance. Trust your own wisdom by investigating the facts. You would've uncovered that Iger probably owns a prop crystal ball, he isn't trading on privileged information, and this purchase is probably part of a larger scheme.
Here's a quick breakdown of Iger's transaction history since joining the board:
|
Date |
Shares |
Price |
Total Investment |
|---|---|---|---|
|
11/29/2011 |
2,670 |
$374.49 |
$999,888.30 |
|
11/19/2012 |
1,780 |
$562.13 |
$1,000,591.40 |
Soon after Iger's appointment to Apple's board, he invested $1 million in the company. Fast-forward a year later, and he repeated the process. I'm fully expecting the same level of excitement and speculation over next November's purchase, when he does it again.
Although two data points form a line, they fail to establish a trend, and this could be one big coincidence. It's possible that Iger is a master market timer, but that suspicion lacks substance. If so, he'd invest a more substantial portion of his net worth. A million dollars is chump change for the Mouse King. Last year, Iger's total compensation package was valued to be worth more than $33 million.
Foolish takeaway
To me, Iger's purchase history portrays a sensible investor that has implemented an automated investment plan. He's done this as a way to compliment his board membership. From this perspective, this purchase is merely part of a larger plan, and it doesn't appear that Iger knows of an imminent product release that's sure to be a home run.
Still, it's always encouraging to see an insider accumulate shares. He obviously believes enough in Apple's future to pour $2 million of his own money into the company in less than a year. In the end, a little investigation revealed an entirely more plausible explanation.
