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Institutional ownership of Apple stock reaches new 5-year low

post #1 of 96
Thread Starter 
Institutional ownership of large-cap stocks is currently at high levels, but there is one glaring exception to that trend: Apple, which is currently at a five-year low among hedge funds, banks, mutual funds, and other powerful types of financial institutions.

Morgan Stanley


Morgan Stanley has polled ownership data since 2009 and found that the top 30 shareholders of large-cap companies tend to own between 30 and 50 percent of a company's total shares. While some companies, such as Google, Microsoft and Amazon, are currently at near-record highs for institutional ownership in the last five years, Apple is actually at its lowest level since 2009.

Analyst Katy Huberty found that Apple's current top 30 ownership share is at just 30 percent, compared to a 36 percent five-year average, and a peak of 40 percent in 2009. She said this is a sign that institutional investors are currently underweight on Apple as compared to its large-cap peers.

"(Institutional investors) hold less concentrated positions in Apple than in the past with the top 30 holders allocating 2.2% of their fund to AAPL, compared to a high of 4.1% in the last five years and Apple's current 2.9% weighting in the S&P 500," Huberty wrote in a note to investors provided to AppleInsider on Wednesday. "By comparison, institutional funds are overweight (on) all other large cap technology stocks in our analysis."

Morgan Stanley found that the current institutional ownership average among S&P 500 companies is at 83 percent of shares outstanding. It's also increasing at a rate of 80 basis points per year, as individuals increasingly sell their single stocks and buy into mutual funds.

Morgan Stanley


Another company that, like Apple, bucks the trend of higher institutional ownership is electric car maker Tesla. Coincidentally, it was revealed earlier this month that the two companies secretly met to talk about undisclosed matters.

Huberty believes that low institutional ownership of Apple, when compared to other large-cap mobile technology stocks, shows that investors are underestimating the iPhone maker's ability to grow and expand into new markets. For example, she sees growth potential in wearable electronics, as well as new services that Apple could provide with its existing ecosystem of hardware and software.

For example, she believes the launch of a so-called "iWatch" from Apple could generate $17.5 billion from existing iPhone owners in the first year alone. The analyst's projections call for sales of between 32 million and 58 million units in the first 12 months of availability.

Other potential opportunities for Apple cited by Huberty include mobile payments and advertising services. She sees Apple's Touch ID fingerprint sensor and 64-bit A7 processor, along with the company's nearly 600 million App Store accounts and 380 million Bluetooth Low Energy devices on the market, as having laid the groundwork for such services to debut in the future.

Morgan Stanley has maintained its "overweight" rating on AAPL stock with a price target of $630.
post #2 of 96
Not surprising because they know AAPL is being manipulated and they need a long term growth stock to be successful. This analysis points out the magnitude of the manipulation. I don't think it has to do with analysts views about lack of new products from Apple.
post #3 of 96
Good. Institutions do not care about the long term, the welfare of employees, or the quality of products. I'd like to see Apple go completely private. Then they don't have to answer to these so-called analysts.
post #4 of 96

Here we go... another 80 comments about how AAPL is being manipulated.

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post #5 of 96
Quote:
Originally Posted by Gustav View Post

Good. Institutions do not care about the long term, the welfare of employees, or the quality of products. I'd like to see Apple go completely private. Then they don't have to answer to these so-called analysts.

 

Those are some pretty broad strokes you're painting with, Gustav. And there is much evidence to the contrary. 

 

My opinion is that the institutional investors are unfortunately listening to the asinine analysts so-often skewered by the readers and editors here and on similar sites.  They can only see gloom & doom for AAPL.

post #6 of 96

What, multi billion dollar institutions want to do things on the up and up?

post #7 of 96
Wankers talking about other wankers and wanking. Sad, really. Apple should buy itself back as much as possible as soon as possible. These wankers also are aiming at the big differential that Apple hype causes in the traditional buy low sell high for they know there's a new category looming. Take the stock out of the market as much as possible minimizing these wankers influence on AAPL.
post #8 of 96

This article highlights the 'Apple challenge' and probably in and of itself indicates why institutional investors are wary.  If even the 'positive outlook' analyst come up with an additionol $17.5 bil in revenue- if the iWatch is a success...   That would be a huge success for any startup company, but you have to factor in Apples size and valuation (which is what their stock price is based on)  So using their existing revenue:profit ratio that would give Apple an additional $5b in profits a year.  Impressive, but also just about exactly the decline in profit Apple saw last year.  So *if* their next big thing is indeed released, and *if* it is a success, they could make up for declines in profits from their existing products and maintain flat profits?

 

That is the up-side.

 

What is the potential downside?

post #9 of 96

This is bullish data. The institutional ownership "pendulum" was at the opposite end when AAPL was 700 and we should have been bearish. As an AAPL long I want to see as many shares as possible liquidated by institutions (in order to buy GOOG, TSLA, etc) and end up retired by Pete Oppenheimer, never to be traded again.

 

Weeks, months, or maybe years from now the pendulum will swing the other way, and the reduced share count will act as jet fuel for the stock price. Patience will be rewarded. Hard numbers prove that these institutions are not smarter than the likes of Carl Icahn, not even close.

post #10 of 96

I hardly bother to trade AAPL anymore. There are easier places to make money in, that is less frustrating.

 

I've made more on AIDS lately (biotech firm) than APPL this past week.

post #11 of 96
Quote:
Originally Posted by Apple ][ View Post
 

I hardly bother to trade AAPL anymore. There are easier places to make money in, that is less frustrating.

 

I've made more on AIDS lately (biotech firm) than APPL this past week.

 

Trading is not the same thing as investing. AAPL is good to trade lately if you're into bearish plays like puts, bear call spreads, bearish butterflies, and other option plays.

 

Investing in AAPL for the long term (5-10 years) is a whole other story and I think will be very rewarding at these prices (IMHO -- caveat emptor)

post #12 of 96

This has to mean that Apple is doomed to failure and Tim Cook should be fired! Yup...I think so!

 

/s

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post #13 of 96
Quote:
Originally Posted by manicakes View Post
 

 

Trading is not the same thing as investing. AAPL is good to trade lately if you're into bearish plays like puts, bear call spreads, bearish butterflies, and other option plays.

 

Investing in AAPL for the long term (5-10 years) is a whole other story and I think will be very rewarding at these prices (IMHO -- caveat emptor)

I totally agree, trading is definitely not the same thing as investing.

 

I don't doubt Apple as a company, and I will continue to buy plenty of Apple products probably until I drop dead.

post #14 of 96
Quote:
Originally Posted by Gustav View Post

Good. Institutions do not care about the long term, the welfare of employees, or the quality of products. I'd like to see Apple go completely private. Then they don't have to answer to these so-called analysts.

Yes, except that isn't true as a rule. It depends on the long term investor. For instance, pension funds. Pension funds want stable stocks with growth potential or dividends. Institutional investors probably are scared away from Apple because the stock is being so heavily manipulated.

post #15 of 96
Quote:
Originally Posted by XamaX View Post

Wankers talking about other wankers and wanking.

Now that made me laugh. I'm considering putting it in my signature.
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post #16 of 96
Quote:
Originally Posted by manicakes View Post

Trading is not the same thing as investing. AAPL is good to trade lately if you're into bearish plays like puts, bear call spreads, bearish butterflies, and other option plays.

Investing in AAPL for the long term (5-10 years) is a whole other story and I think will be very rewarding at these prices (IMHO -- caveat emptor)

Agreed, but don't institutions go for the long term investments?
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post #17 of 96
Doesn't help that Apple has decided to go long periods of time without product announcements. No, I'm not suggesting they follow someone else's timeline or release things before they're ready but it would be nice if they could get on a schedule where they didn't have these long gaps in between announcements. Once again it looks there will be 6-7 months where Apple has gone quiet. Maybe we'll get something before WWDC but if there was some product announcement coming in March or April wouldn't we be hearing rumors about it?
post #18 of 96
Quote:
Originally Posted by Frood View Post

This article highlights the 'Apple challenge' and probably in and of itself indicates why institutional investors are wary.  If even the 'positive outlook' analyst come up with an additionol $17.5 bil in revenue- if the iWatch is a success...   That would be a huge success for any startup company, but you have to factor in Apples size and valuation (which is what their stock price is based on)  So using their existing revenue:profit ratio that would give Apple an additional $5b in profits a year.  Impressive, but also just about exactly the decline in profit Apple saw last year.  So *if* their next big thing is indeed released, and *if* it is a success, they could make up for declines in profits from their existing products and maintain flat profits?

That is the up-side.

What is the potential downside?
But your assuming all Apple has up its sleeve as a so-called "iWatch" AND that there will be a continued decline in profits from existing products. If that's really how investors feel then let Apple keep buying back shares and maybe they can eventually take the company private.
post #19 of 96
Originally Posted by XamaX View Post

Wankers talking about other wankers and wanking. 

I can't better that or agree with it more. Give yourself a pat on the back; any more than that would be onanistic.

"Wankers talking about other wankers and wanking." XamaX

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"Wankers talking about other wankers and wanking." XamaX

I'll never get back the time i just wasted reading that post." Miami Craig
" It's like you've achieved some kind of irrelevance zen, or...

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post #20 of 96
Quote:
Originally Posted by Gustav View Post

Good. Institutions do not care about the long term, the welfare of employees, or the quality of products. I'd like to see Apple go completely private. Then they don't have to answer to these so-called analysts.

Apple could go private if someone steps up with $555 billion (assuming a premium buyout) 

 

Who has that kind of money?

 

Edit: Ok, I did a little figuring. It would require the 16 wealthiest people in the world to invest all of their net worth to buy Apple.


Edited by mstone - 2/26/14 at 8:48am

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post #21 of 96
Quote:
Originally Posted by rob53 View Post

Not surprising because they know AAPL is being manipulated and they need a long term growth stock to be successful. This analysis points out the magnitude of the manipulation. I don't think it has to do with analysts views about lack of new products from Apple.

This is true, no fund manager is going to risk returns on the company they know if being manipulated, also, Icahn got is hands on the company and I believe institutional investors are scared off by him, since he attempts to take them over and make the company do his bidding.

post #22 of 96

I totally understand the fund managers' perspective and might even do the same thing if I were in their shoes. Apple is a huge company, with big profit margins, and without any monopoly power (as its traditionally understood, anyway). Take away the name Apple, call it "company X", and 9 times out of 10, you'd expect to see stagnant profits *at best*. And more likely, declining profits as other firms compete with you and drive down your margins and/or take market share. 

 

To argue that Apple is different than Company X is radical. To take other people's money and invest it in Apple - -based on that radical argument -- could seem very risky for fund managers who want to keep their jobs. Far safer to stick with the conventional wisdom and invest your customers' money elsewhere. If you're wrong about Apple -- so what? So were all your competitors. You won't lose your job if you don't buy AAPL and it goes up, because that's what everyone else is doing too. But if you're the one guy who does buy it and it goes down, you're screwed. 

 

But as an individual investor who is answerable only to myself, and who actually believes the radical notion that Apple really is fundamentally different from Company X, I continue to hold my AAPL shares. And I thank the herd-following fund managers for creating this nice opportunity for Apple to buy back its own shares at a discounted (relative to what I think its true value is) price (I'd buy more shares myself, but I'm tapped out right now). 

post #23 of 96
That means it has lot of room to move higher. Cook and board should not forget and behave as if it is earnings conference call during shareholders meeting lol.gif Need to hide ego 1tongue.gif.
Jobs wanted useless board so that he can focus on the products but now as he is gone, useless board is meaningless and of no good. Few need to go 1bugeye.gif
Edited by helicopterben - 2/26/14 at 8:48am
post #24 of 96
Quote:
Originally Posted by Rogifan View Post

Doesn't help that Apple has decided to go long periods of time without product announcements. No, I'm not suggesting they follow someone else's timeline or release things before they're ready but it would be nice if they could get on a schedule where they didn't have these long gaps in between announcements. Once again it looks there will be 6-7 months where Apple has gone quiet. Maybe we'll get something before WWDC but if there was some product announcement coming in March or April wouldn't we be hearing rumors about it?

Apple should never again get into a position of having to beg for money from a company like Microsoft or act to satiate a person like Carl Icahn. Let them take their time and form new markets and products in a manner that makes sense.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #25 of 96
Quote:
Originally Posted by island hermit View Post
 

Here we go... another 80 comments about how AAPL is being manipulated.

 

Well maybe not manipulated but I do think the reduction in institutional investors relieves a lot of pressure on Apple do to something they do not want to do (sell cheap, no profit phones to increase market share for example). If the stock settles in a certain range then so be it. The price of a stock does not indicate the success of a company, only the ability of investors to cash in. What’s good for investors and what’s good for a company are often at odds. By any measurement Apple is a large, influential, innovative, successful company. The fact that some hedge fund isn’t able to make tons of money on AAPL doesn’t change that fact.

post #26 of 96
Quote:
Originally Posted by lkrupp View Post
 

 

Well maybe not manipulated but I do think the reduction in institutional investors relieves a lot of pressure on Apple do to something they do not want to do (sell cheap, no profit phones to increase market share for example). If the stock settles in a certain range then so be it. The price of a stock does not indicate the success of a company, only the ability of investors to cash in. What’s good for investors and what’s good for a company are often at odds. By any measurement Apple is a large, influential, innovative, successful company. The fact that some hedge fund isn’t able to make tons of money on AAPL doesn’t change that fact.

 

Hedge fund?

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post #27 of 96
Quote:
Originally Posted by island hermit View Post

Here we go... another 80 comments about how AAPL is being manipulated.

http://appleinsider.com/articles/09/03/13/jon_stewart_exposes_apple_stock_manipulation
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post #28 of 96

Suck on your pacifiers. Bought 1024 Apple back in April 1993 @ US$12.50 each, when I got an unexpected bonus. Played several other .com's after that but was contend to hang on to my Apples. Yes several ups and down and a divorce where the ex wanted either half the stock or the T-Bird in 1999. Needless to say she got the older bird. So after ups and downs,- still a happy owner today with 4096 shares.


Edited by thegreatbosan - 2/26/14 at 9:01am
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post #29 of 96

 

Oh, yes... because I always go to Jon Stewart for my investment advice.

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post #30 of 96
Quote:
Originally Posted by SpamSandwich View Post

Apple should never again get into a position of having to beg for money from a company like Microsoft or act to satiate a person like Carl Icahn. Let them take their time and form new markets and products in a manner that makes sense.

Let's just get this accurate ...

http://www.forbes.com/sites/ericjackson/2012/03/01/steve-jobs-used-patents-to-get-bill-gates-to-make-1997-investment-in-apple/
Edited by digitalclips - 2/26/14 at 9:09am
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post #31 of 96
Quote:
Originally Posted by rob53 View Post

Not surprising because they know AAPL is being manipulated and they need a long term growth stock to be successful. This analysis points out the magnitude of the manipulation. I don't think it has to do with analysts views about lack of new products from Apple.

Nonsense. Institutional shareholding horizons are much shorter than those of individuals.

Moreover, they're most of the marginal traders (and hence, drivers of volatility) in the market.
post #32 of 96
Quote:
Originally Posted by Rogifan View Post

Doesn't help that Apple has decided to go long periods of time without product announcements. No, I'm not suggesting they follow someone else's timeline or release things before they're ready but it would be nice if they could get on a schedule where they didn't have these long gaps in between announcements. Once again it looks there will be 6-7 months where Apple has gone quiet. Maybe we'll get something before WWDC but if there was some product announcement coming in March or April wouldn't we be hearing rumors about it?

 

Sorry, but I disagree.  We can't have it both ways.  Either Apple caters to Wall Street or it follows its own schedule.  Apple would no longer be Apple if it released a product prematurely.  Wall Street can F$%!! itself, and I'm speaking as a guy who holds his fair share of AAPL.

post #33 of 96
Quote:
Originally Posted by manicakes View Post
 

This is bullish data. The institutional ownership "pendulum" was at the opposite end when AAPL was 700 and we should have been bearish. As an AAPL long I want to see as many shares as possible liquidated by institutions (in order to buy GOOG, TSLA, etc) and end up retired by Pete Oppenheimer, never to be traded again.

 

Weeks, months, or maybe years from now the pendulum will swing the other way, and the reduced share count will act as jet fuel for the stock price. Patience will be rewarded. Hard numbers prove that these institutions are not smarter than the likes of Carl Icahn, not even close.

 

I heartily agree; I admire and share your long-term attitude.

 

On a related subject, there's a good article I read today about how we're not going to see Continuous Glucose Monitoring (CGM) in the iWatch.  At first I disagreed, because for the first 3/4ths of the article the author makes his arguments and it sounds like he's saying the iWatch will never see CGM.  Then in the end, he clarifies and tells us that it's very unlikely we'll see CGM in iWatch V1, but that today Apple is doing exactly what it needs to do for us to see CGM in a 2nd or 3rd generation iWatch.  I think he's right.

 

Five to ten years is a good time frame.  Five to ten months is short-sighted and five to ten weeks is insane.

post #34 of 96
Another thing that blows my mind is how other companies are essentially given a free pass and the benefit of the doubt but everything Apple does is questioned and doubted. Case in point, Samsung's new fingerprint scanner. I have seen very few articles inquiring on exactly how it's implemented, where the data is stored, how secure it is, etc. Since Samsung has developer APIs for this you would think the media would be especially interested in how secure it is. But so far nothing, just crickets. Such a double standard.
post #35 of 96
The dumb guys. I mean the stocks falling over nothing. Really I mean what's gone wrong with Apple this year? NOTHING!!! Invest your not gonna loose anything!!! Seriously and people invest in ssinh when there always getting suided by Apple or Vacum Cleaner company!!! Copies.
post #36 of 96
Quote:
Originally Posted by island hermit View Post

Oh, yes... because I always go to Jon Stewart for my investment advice.

I couldn't care less if it was the Sara Palin show, it was what Cramer said that matters.
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post #37 of 96
Quote:
Originally Posted by delreyjones View Post

Sorry, but I disagree.  We can't have it both ways.  Either Apple caters to Wall Street or it follows its own schedule.  Apple would no longer be Apple if it released a product prematurely.  Wall Street can F$%!! itself, and I'm speaking as a guy who holds his fair share of AAPL.

100% agree and I am in the same boat.
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post #38 of 96
Quote:
Originally Posted by delreyjones View Post

Sorry, but I disagree.  We can't have it both ways.  Either Apple caters to Wall Street or it follows its own schedule.  Apple would no longer be Apple if it released a product prematurely.  Wall Street can F$%!! itself, and I'm speaking as a guy who holds his fair share of AAPL.
I never said Apple should release products prematurely. But I would like to see them get on a schedule where there aren't long gaps that create a vacuum that can be filled with FUD and D&G. Apple used to release iPads in the March quarter. Then with the iPad mini they got moved to the October quarter. Now the March quarter is basically empty, and most of the June quarter is too. Is there no way for Apple to space stuff out so they're not announcing everything in basically one quarter?
post #39 of 96
Quote:
Originally Posted by SpamSandwich View Post

Apple should never again get into a position of having to beg for money from a company like Microsoft or act to satiate a person like Carl Icahn. Let them take their time and form new markets and products in a manner that makes sense.
So announcing products all in one quarter makes sense? I don't think so. Last year when Cook was asked about new products/categories he said Apple would be releasing stuff in the fall of 2013 and across 2014. To me "across 2014" doesn't mean Q4. That's why I hope we get some big announcements at WWDC.
post #40 of 96
Quote:
Originally Posted by digitalclips View Post


I couldn't care less if it was the Sara Palin show, it was what Cramer said that matters.

 

Oh, good. Now I at least know which analyst you trust.

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