Big mutual funds loaded up on AAPL in Q3, some now worrying about growth

AppleInsider · November 15, 2018 12:49PM

Three big-name mutual funds loaded up on Apple stock in the third quarter, while bailing out of the other big names in tech -- a move which is now setting up investors for short-term loss from shareholder sell-off.

Jony Ive and Tim Cook at the iPhone XR hands on station

J.P. Morgan Chase & Company added 1.3 million shares in the third calendar quarter, climbing the total held to 42.7 million. Janus Henderson purchased 3.3 million shares for a total of 20.8 million. The biggest buyer of the three was Fidelity, with it growing its total to 110.9 million shares, adding seven million shares in the quarter.

Even smaller funds got in the act. Coatue Management grew its Apple stock holdings to over 884,000 shares, and Tiger Global Management now has over one million shares. Warren Buffett's Berkshire Hathaway increased its position in Apple by 522,802 shares as well.

The moves came at the same time that funds were starting to ditch other tech firms in general because of over-exposure and concerns about the so-called FAANG stocks. The FAANG stock grouping consists of Facebook, Amazon, Apple, Netflix, and Alphabet which was called Google when the name was originally applied.

The data was all exposed from quarterly Securities and Exchange Commission data, and may not represent what the firms currently hold. Beyond just Buffett's position on retaining Apple stock, one fund manager isn't concerned about the drop-off, and instead of selling, is buying for the long-term.

Speaking to Reuters, Esplanade Capital founder said that Apple "it is not a Facebook or a Google with eye-popping growth but we're not paying for that." Kravetz purchased more Apple stock on Monday, when the sell-off was well underway.

J.P. Morgan on Monday lowered its target price for Apple on a short-term basis, buying into reports from the supply chain suggesting that Apple had cut expected orders. A number of other funds did as well, based on the same component producer data which historically has no reflection on what Apple delivers from a sales or financial standpoint.

Also on Monday, Apple suppliers Lumentum and Japan Display have cut financial forecasts, citing a decrease in expected orders from Apple. However, it isn't presently clear how much these cuts vary from years past, nor is it clear exactly what the two suppliers were expecting based on information from Apple, or based on internal guess-work by the companies themselves.

Apple is in the midst of a sell-off. The stock started taking a hit when Apple announced that it would no longer report unit sales of hardware, which has continued largely unabated since, despite the last quarter being a record-breaking one for the company.

KidGloves · November 15, 2018 1:41PM

Here's an idea. Why not make some computers that more people can actually afford and try relying slightly less on one product? Apple could do so much more with the Mac and although it's nowhere near the income they've getting from the iPhone, they'll need something solid to fall back on when phones start to become a commodity. Let's face it, the gap between the Chinese phones and the iPhone XS isn't as big as the price difference would suggest. And they're closing the gap all the time, just as Apple is getting really bold about charging. They're leaving SO MUCH room for the Chinese brands to exploit.

Nobody is asking for a $400 MacBook but why not offer a way in with lower specced machine like an updated white plastic MacBook (a bit slower, non-retina, maybe spinning drive) and in a similar way offer a lower-specced version of the Mac mini. These people will move onto the more expensive stuff in time.

When the gloss goes off the iPhone there's going to be a bloodbath.

andrewj5790 · November 15, 2018 1:48PM

KidGloves said:

Here's an idea. Why not make some computers that more people can actually afford and try relying slightly less on one product? Apple could do so much more with the Mac and although it's nowhere near the income they've getting from the iPhone, they'll need something solid to fall back on when phones start to become a commodity. Let's face it, the gap between the Chinese phones and the iPhone XS isn't as big as the price difference would suggest. And they're closing the gap all the time, just as Apple is getting really bold about charging. They're leaving SO MUCH room for the Chinese brands to exploit.

Nobody is asking for a $400 MacBook but why not offer a way in with lower specced machine like an updated white plastic MacBook (a bit slower, non-retina, maybe spinning drive) and in a similar way offer a lower-specced version of the Mac mini. These people will move onto the more expensive stuff in time.

When the gloss goes off the iPhone there's going to be a bloodbath.

Yawn... been predicted since the dawn of the iPhone... this exact same thing happened last year. People love to hate Apple. Their profit margins have never moved substantially out of the 35-40% range. They’ve always been and will always be a premium device seller. It’s worked for them always, over everyone’s protests who were all about razor thin margins sold to many many people.

bells · November 15, 2018 2:03PM

KidGloves said:

Here's an idea. Why not make some computers that more people can actually afford and try relying slightly less on one product? Apple could do so much more with the Mac and although it's nowhere near the income they've getting from the iPhone, they'll need something solid to fall back on when phones start to become a commodity. Let's face it, the gap between the Chinese phones and the iPhone XS isn't as big as the price difference would suggest. And they're closing the gap all the time, just as Apple is getting really bold about charging. They're leaving SO MUCH room for the Chinese brands to exploit.

Nobody is asking for a $400 MacBook but why not offer a way in with lower specced machine like an updated white plastic MacBook (a bit slower, non-retina, maybe spinning drive) and in a similar way offer a lower-specced version of the Mac mini. These people will move onto the more expensive stuff in time.

When the gloss goes off the iPhone there's going to be a bloodbath.

Apple’s stock tanking has little to do with Apple’s performance. Apple met all of its guidance numbers and had a record breaking quarter. The stock tanking is making somebody money. Investors like buffet load up in times like these because they are long term investors.

While Apple paying more attention to its Macs would be nice, this isn’t a real growth area. Growth will be in services and new categories.

it is easy for Chinese companies to offer products for less when their research budget involves taking somebody else’s ideas. With that said, Apple’s prices are very competitive with Samsung.

The phone doesn’t have to become a commodity is companies like Apple continue to innovate with features like Apple Pay and Face ID.

gmgravytrain · November 15, 2018 2:27PM

This Apple stock sell-off seems somewhat fabricated to me. More panic feeds on panic. The panic can be due to conservative guidance or Apple deciding not to be transparent about unit sales, but that doesn't mean Apple's revenue and profits will tank. There's also the additional rumors from component suppliers. None of the rumors have been substantiated. Those mutual funds should be playing a long game so I don't see why they're so worried about a single quarter. As Cramer always says, "Buy Apple and hold it. Don't trade it."

MacPro · November 15, 2018 2:38PM

We bought more AAPL during this dip. Anything over 170 was my dream 15 years ago (pre-split taken into account) so it's all just icing on top now.

adamc · November 15, 2018 2:47PM

“Also on Monday, Apple suppliers Lumentum and Japan Display have cut financial forecasts, citing a decrease in expected orders from Apple.“

You are wrong they didn’t mentioned Apple in their release.

techno · November 15, 2018 3:05PM

andrewj5790 said:

KidGloves said:

Here's an idea. Why not make some computers that more people can actually afford and try relying slightly less on one product? Apple could do so much more with the Mac and although it's nowhere near the income they've getting from the iPhone, they'll need something solid to fall back on when phones start to become a commodity. Let's face it, the gap between the Chinese phones and the iPhone XS isn't as big as the price difference would suggest. And they're closing the gap all the time, just as Apple is getting really bold about charging. They're leaving SO MUCH room for the Chinese brands to exploit.

Nobody is asking for a $400 MacBook but why not offer a way in with lower specced machine like an updated white plastic MacBook (a bit slower, non-retina, maybe spinning drive) and in a similar way offer a lower-specced version of the Mac mini. These people will move onto the more expensive stuff in time.

When the gloss goes off the iPhone there's going to be a bloodbath.

Yawn... been predicted since the dawn of the iPhone... this exact same thing happened last year. People love to hate Apple. Their profit margins have never moved substantially out of the 35-40% range. They’ve always been and will always be a premium device seller. It’s worked for them always, over everyone’s protests who were all about razor thin margins sold to many many people.

I don't think andrewj5790 is hating on Apple. I am an Apple loyalist and I too feel like they are pricing themselves out of reach for many people. I don't think Apple is doomed. However, every rose loses it bloom.

MacPro · November 15, 2018 3:30PM

techno said:

andrewj5790 said:

KidGloves said:

Here's an idea. Why not make some computers that more people can actually afford and try relying slightly less on one product? Apple could do so much more with the Mac and although it's nowhere near the income they've getting from the iPhone, they'll need something solid to fall back on when phones start to become a commodity. Let's face it, the gap between the Chinese phones and the iPhone XS isn't as big as the price difference would suggest. And they're closing the gap all the time, just as Apple is getting really bold about charging. They're leaving SO MUCH room for the Chinese brands to exploit.

Nobody is asking for a $400 MacBook but why not offer a way in with lower specced machine like an updated white plastic MacBook (a bit slower, non-retina, maybe spinning drive) and in a similar way offer a lower-specced version of the Mac mini. These people will move onto the more expensive stuff in time.

When the gloss goes off the iPhone there's going to be a bloodbath.

Yawn... been predicted since the dawn of the iPhone... this exact same thing happened last year. People love to hate Apple. Their profit margins have never moved substantially out of the 35-40% range. They’ve always been and will always be a premium device seller. It’s worked for them always, over everyone’s protests who were all about razor thin margins sold to many many people.

I don't think andrewj5790 is hating on Apple. I am an Apple loyalist and I too feel like they are pricing themselves out of reach for many people. I don't think Apple is doomed. However, every rose loses it bloom.

Apple's sales data and subsequent profit levels right up to the present would refute that theory.

YP101 · November 15, 2018 3:31PM

Affordable means nothing these days. Since Apple itself provide 2 years no interest payment, anyone who willing or can pay monthly bill there should be no problem about affordability.

Thanks to millennial, dawn of lease life.

Also why Apple should provide cheap Mac?

All cheap PC company nearly go broke one point or gone.(remember Dell, Compaq, IBM etc.. Dell moves all manufacturing to china order to survive.)

Apple currently very comfortable where they are.

Any PC or smartphone life span is 3 years or more. Even the product cost near $4,000, each month you only need to pay less than $167.

If anyone can not afford this payment for 2 years then those people are not going to buy any big price item.

They will always compare price and look for discount. This is nothing wrong. But these type of people will not buy 65-70' OLED 4K TV either.

Apple just saying you want our product? then pay it and the people loves for it.

The wall street just don't like Apple's new quarterly report that no longer include actual number sales. You know what? Even google does not saying how many pixel phone sold.and they don't care. Why already saturated smartphone market, the wall street rely on Apple's iPhone sale number to measure Apple's growth?

So far I don't see any decrease revenue of Apple year over year. But still stock stuck on under $300.

The street way over sold. Well good for Apple buy back and Buffet.

DAalseth · November 15, 2018 4:05PM

One thing I've learned over decades of watching the market, it's all about expectations. Fundamentals don't really mean much any more. If analysts think something is going to go up or down, they end up talking the market in that direction.

JWSC · November 15, 2018 9:50PM

gmgravytrain said:

This Apple stock sell-off seems somewhat fabricated to me. More panic feeds on panic. The panic can be due to conservative guidance or Apple deciding not to be transparent about unit sales, but that doesn't mean Apple's revenue and profits will tank. There's also the additional rumors from component suppliers. None of the rumors have been substantiated. Those mutual funds should be playing a long game so I don't see why they're so worried about a single quarter. As Cramer always says, "Buy Apple and hold it. Don't trade it."

Fabricated, yes. They just want to move the market. “Be greedy when others are fearful. Be fearful when others are greedy.”

SpamSandwich · November 15, 2018 9:52PM

DAalseth said:

One thing I've learned over decades of watching the market, it's all about expectations. Fundamentals don't really mean much any more. If analysts think something is going to go up or down, they end up talking the market in that direction.

Pretty much. This is why chartists amuse me so much. As soon as patterns are detected, the patterns become useless.

KirbyFitBoston · November 16, 2018 12:41AM

KidGloves said:

Here's an idea. Why not make some computers that more people can actually afford and try relying slightly less on one product? Apple could do so much more with the Mac and although it's nowhere near the income they've getting from the iPhone, they'll need something solid to fall back on when phones start to become a commodity. Let's face it, the gap between the Chinese phones and the iPhone XS isn't as big as the price difference would suggest. And they're closing the gap all the time, just as Apple is getting really bold about charging. They're leaving SO MUCH room for the Chinese brands to exploit.

Nobody is asking for a $400 MacBook but why not offer a way in with lower specced machine like an updated white plastic MacBook (a bit slower, non-retina, maybe spinning drive) and in a similar way offer a lower-specced version of the Mac mini. These people will move onto the more expensive stuff in time.

When the gloss goes off the iPhone there's going to be a bloodbath.

This is nonsense.

First the design language u long for is over and has been for some time. I’d argue the launch of the MBA and the revision of the mini complete at last the entire lineup in the same set of basic rooted design principles.

Why does everyone want Apple to make stuff for poor people? They never have. Ever.

Perhaps they could cut cut their margins but you think the sell off would’ve been less bad and the increase in sales from cheaper machines would offset these investor losses? As I’ve heard so often here.

Life is hard. Apple doesn’t need to subsidize the worlds mobile or pc usage to the detriment of thier own bottom line. That’s why Asus and Acer and TK Max and Walmart exist. It’s an aspirational brand.

Lastly the iPhone slowing in growth is a truly bizarre and over wrought non problem. They certa

KirbyFitBoston · November 16, 2018 12:51AM

People may choose to buy them less often as they rise above 1000 over the next 10 years but nothing is replacing the telephone it’s yet to be replaced in 75 years ... we’ve moved it around and put it in the car or in a bag or now in a watch - but the phone itself the primary communication apparatus that humanity uses to communicate with itself is going nowhere friend. Apple was wise to hitch thier wagon to it and then building everything else around it - insures they will develop several unknowable things in the future but they will always sell an iPhone. And people will buy it.

Wsll Street is horse shit. Following or watching what happens on any given day especially about Apple is dumb.

fastasleep · November 16, 2018 1:39AM

KidGloves said:

Here's an idea. Why not make some computers that more people can actually afford and try relying slightly less on one product? Apple could do so much more with the Mac and although it's nowhere near the income they've getting from the iPhone, they'll need something solid to fall back on when phones start to become a commodity. Let's face it, the gap between the Chinese phones and the iPhone XS isn't as big as the price difference would suggest. And they're closing the gap all the time, just as Apple is getting really bold about charging. They're leaving SO MUCH room for the Chinese brands to exploit.

Nobody is asking for a $400 MacBook but why not offer a way in with lower specced machine like an updated white plastic MacBook (a bit slower, non-retina, maybe spinning drive) and in a similar way offer a lower-specced version of the Mac mini. These people will move onto the more expensive stuff in time.

When the gloss goes off the iPhone there's going to be a bloodbath.

You know how I know I'm about to read something stupid in this forum? When someone starts with "Here's an idea" with regard to what Apple should do, as if they're about to unleash a brilliant idea that Apple's management hasn't thought of yet.

The last white plastic MacBook came out in 2010. The lowest configuration was $999, which with inflation is equal to $1159 in today's dollars. The new MacBook Air starts at $1199. Even the cheapest Performas in the 90's were more expensive than that.

The Mac you're talking about has never existed and will never exist, because Apple doesn't make cheap garbage to placate armchair economists who fundamentally misunderstand what Apple is doing and why.

Big mutual funds loaded up on AAPL in Q3, some now worrying about growth

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