Low institutional ownership of Apple shares continues, despite stock's recent highs

Posted:
in AAPL Investors edited May 2015
Though shares of Apple have been trending upward lately, institutional investors -- including hedge funds, banks, mutual funds and other powerful types of financial institutions --?have not yet bought in, suggesting that when they do, AAPL stock could move much higher.




Analyst Katy Huberty with Morgan Stanley issued a research note to investors on Friday, a copy of which was provided to AppleInsider, revealing data showing that the top 100 institutions reduced their positions in Apple from the fourth quarter of 2013 to the first quarter of 2014. As it stands, Apple is the only large-cap technology company where institutional ownership is below the S&P 500 weighting of 3.2 percent -- Amazon, Google, Facebook and even Microsoft are all currently ahead of their S&P 500 weighting.

That's because institutional investors recently rotated into "value" and out of "hyper growth" stocks, Huberty said. That transition is said to have benefitted HP and Microsoft, both of which saw their portfolio allocation levels grow 10 basis points from the fourth quarter of 2013 to the first of 2014.

As it currently stands, the top 100 holders of AAPL stock are "significantly underweight," Huberty said. That's in contrast to the "overweight bias" the same investors have for every single other large-cap stock in her analysis, which also includes names like Cisco, Oracle, Qualcomm, Intel, and IBM.

"We believe this sets up well for further share price upside heading into the iPhone 6 product cycle, iWatch launch, and potential new services," Huberty said.




The same analyst called out unconventionally low institutional ownership of Apple in February, noting that ownership of AAPL stock among powerful financial institutions had reached a new 5-year low.

Back in February, Huberty revealed that the top Apple shareholders had allocated 2.2 percent of their total portfolios to the iPhone maker. Since then it's actually dropped 20 basis points to 2 percent, while Apple's S&P 500 weighting grew from 2.9 percent to 3.2 percent.

Morgan Stanley continues to see a buying opportunity in Apple for investors, and has maintained its "overweight" rating for the company's stock. Its baseline price target is $690, though the firm has a "bull case" outlook of $860.

Comments

  • Reply 1 of 19

    For once the retails have the edge on the so called "smart" money.  No doubt do to the inept, feckless sell-side analysts that don't understand the first think about what makes Apple "Apple."

  • Reply 2 of 19
    SpamSandwichSpamSandwich Posts: 30,732member
    With analysts like her, who needs enemies?
  • Reply 3 of 19
    razorpitrazorpit Posts: 912member

    Their loss, my gain...

  • Reply 4 of 19
    darelrexdarelrex Posts: 56member
    Right about a year ago, Harvard dumped all its Apple stock. Since then, the price has gone up about 33%. Ouch.
  • Reply 5 of 19
    SpamSandwichSpamSandwich Posts: 30,732member
    darelrex wrote: »
    Right about a year ago, Harvard dumped all its Apple stock. Since then, the price has gone up about 33%. Ouch.

    The stupidity of intellectuals...
    darelrex
  • Reply 6 of 19
    noelosnoelos Posts: 101member
    AppleInsider, please learn the difference between a basis point and a percentage point.
  • Reply 7 of 19
    hametahameta Posts: 79member
    suggesting that when they do, AAPL stock could move much higher.


    AAPL Stock Could HAVE DOUBLED or Even HAVE TRIPLED Without VILLAIN's MARKET MANEUVERING !!!

    So IT'S A BIG JOKE that " Analysts Target AAPL $690 - $860 NOW !

    Ugly Latest " ENGINEERED AAPL DECCAN PLATEAU SUPPRESSION SCHEME " by VILLAIN !!!

    1000

    1000



  • Reply 8 of 19
    auxioauxio Posts: 1,959member

    Seems like big investment houses prefer investing in companies they can bully.

     

    Kinda reminds me of a story I read from one of the lead software developers at Atari who talked about how everyone involved in a project would want to put their mark on it.  So what he would do is get people to do things like pick a colour for something in the game (or other trivial details) and make it seem like it was the most important thing.

     

    Maybe Apple should do the same thing: bring big investors in and get them involved in some trivial company details so that they feel important.

  • Reply 9 of 19
    Lack of institutional investors is a good thing and a bad thing. On the good side, it removes most of the big-drop volatility that institutional transactions can bring. On the bad side, it means that there is also less up-side pressure on the stock.

    For the record: it's a very lucky individual that can out-guess institutional movement.
  • Reply 10 of 19
    solipsismxsolipsismx Posts: 19,566member
    [@]HAMETA[/@],

    You may actually get some responses and actually contribute to the conversation if you didn't format your comments like it's an forwarded email chain letter from an aging, techtarded family member just using the internet for the first time. Try to appeal to the reader, not make their eyes bleed.
  • Reply 11 of 19
    anantksundaramanantksundaram Posts: 18,956member
    Quote:

    Originally Posted by noelos View Post



    AppleInsider, please learn the difference between a basis point and a percentage point.

    Um.... AI said (quoting Huberty): ".....top Apple shareholders had allocated 2.2 percent of their total portfolios to the iPhone maker. Since then it's actually dropped 20 basis points to 2 percent,....."

     

    Where are they wrong? Do you know what a basis point is?

  • Reply 12 of 19
    hmmhmm Posts: 3,405member
    Quote:

    Originally Posted by SolipsismX View Post



    @HAMETA,



    You may actually get some responses and actually contribute to the conversation if you didn't format your comments like it's an forwarded email chain letter from an aging, techtarded family member just using the internet for the first time. Try to appeal to the reader, not make their eyes bleed.



    I realize he's trolling, but a couple of the photo references made me laugh.

  • Reply 13 of 19
    SpamSandwichSpamSandwich Posts: 30,732member
    Quote:

    Originally Posted by hmm View Post

     



    I realize he's trolling, but a couple of the photo references made me laugh.


     

    At least he's mostly amusing, unlike Tekstud.

  • Reply 14 of 19
    hmmhmm Posts: 3,405member
    Quote:

    Originally Posted by SpamSandwich View Post

     

     

    At least he's mostly amusing, unlike Tekstud.




    He is amusing. I noticed that he picked a mountain range photo that almost perfectly parallels the shape of that stock graph along with the constant villain references.

  • Reply 15 of 19
    froodfrood Posts: 771member
    Quote:

    Originally Posted by DarelRex View Post



    Right about a year ago, Harvard dumped all its Apple stock. Since then, the price has gone up about 33%. Ouch.



    Quote:
    Originally Posted by SpamSandwich View Post





    The stupidity of intellectuals...

     

    It really depends on where they reinvested it....

  • Reply 16 of 19
    Quote:
    Originally Posted by Jack Baker View Post

     

    For once the retails have the edge on the so called "smart" money.  No doubt do to the inept, feckless sell-side analysts that don't understand the first think about what makes Apple "Apple."


     

    I don't think they give a damn about what makes Apple "Apple" -- you said it right the first time "feckless."

     

    The Hedge fund managers want a stock they can pump and dump and manipulate. With Apple selling so much product and having so much in cash reserves -- it's got a higher EPS than their darling stocks. So in effect; the tail cannot wag the dog. They cannot get enough leverage to manipulate the stock fluctuations.

     

    If Wall Street were based on honest evaluation of corporations and the feckless Futures Contracts were actually about stabilizing prices and not creating scarcity -- Apple would be the darling of the stock market world. But no, Wall Street is a casino and the game is rigged.

     

    >> Can you tell I'm pretty cynical about the Financial Service racket?

  • Reply 17 of 19
    hmmhmm Posts: 3,405member
    Quote:

    Originally Posted by Fake_William_Shatner View Post



     

     

    If Wall Street were based on honest evaluation of corporations and the feckless Futures Contracts were actually about stabilizing prices and not creating scarcity -- Apple would be the darling of the stock market world. But no, Wall Street is a casino and the game is rigged.

     


    By honest I'll assume you mean tied to fundamentals. If that was the case Apple might still be where they are now. I suspect some of the others would be much lower.

  • Reply 18 of 19
    darelrexdarelrex Posts: 56member

    Oh look, we're now at the two-year anniversary of Harvard dumping its Apple stock. They would've gained 95% if they had held it. Sure hope they put that money into something truly amazing.

  • Reply 19 of 19
    razorpitrazorpit Posts: 912member

    Nice, thanks for reminding us not to go to / send our kids to Harvard's School of Investments.  ;-)

    darelrex
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