Key Takeaways:
Apple Inc. CEO Tim Cook and a top Nike Inc. executive each bought $1 million of the retailer’s stock, signaling insider confidence after a steep share-price decline.
The transactions were disclosed in Form 4 filings with the Securities and Exchange Commission, a requirement for corporate insiders.
Cook, who serves as Nike’s lead independent director, purchased 25,000 shares on Friday for $1 million at an average price of $42.43. Nike President and CEO Elliott Hill bought about 23,660 shares on Monday for $1 million, paying an average of $42.27.
Shares rose 2.2% in after-hours trading following the disclosures. The purchases are notable as they come after Nike’s stock has fallen 30% year-to-date.
Cook has been a member of Nike's board of directors since 2005. This latest purchase increases his holdings to 130,480 shares, valued at approximately $5.7 million based on Tuesday's closing price.
The move comes after a previous $3 million investment in Nike shares by Cook at the end of December. The stock has performed poorly since that time.
Hill’s total holdings in the company are now valued at $11.7 million following his recent purchase.
The coordinated buying by two high-profile executives, one from the tech world and one from within Nike, could be interpreted by investors as a strong belief that the company's stock is currently undervalued. Such significant insider buys often precede periods of improved stock performance.
These purchases provide a bullish signal for the athletic apparel company. Investors will be watching Nike's next earnings report to see if the executive's confidence is backed by improving business fundamentals.
This article is for informational purposes only and does not constitute investment advice.
