Apple Inc. (AAPL): AQR Capital’s Top Pick

Page 1 of 2

Apple Inc. (NASDAQ:AAPL) is the top stock pick among the hedge funds we track. Let’s take a look at one money manager in particular that holds a stake in the tech giant.

AQR Capital was founded in 1998 by Cliff Asness and other former Goldman Sachs alums. AQR invests in public equities across the world and as of 2011 managed upwards of $44 billion. Asness graduated from the University of Pennsylvania with dual degrees in Economics and Engineering, and also earned his MBA and ultimately his PhD in Finance from the University of Chicago. According to the Financial Times, AQR ”takes a systematic, computer-assisted approach to investment involving both value and momentum factors.” After reviewing AQR’s most recent 13F – which is filed with the SEC quarterly and reveals the majority of public securities owned by the firm – we found that AQR was upping its shares in each of its top five holdings by at least 15%. Outlined below are AQR’s top five holdings:

Apple Inc. (NASDAQ:AAPL) saw AQR up its stake 16% during 3Q 2012 and kept the tech stock as its number one 13F holding. Apple is expected to be a standout of the 2012 holiday season, thanks to new iterations of its iPhone and iPad. What should help drive Apple’s industry-leading long-term expected EPS growth is its ability to continually introduce new products. This includes the potential launch of an iTV. The tech giant also has a solid balance sheet with no debt and a large cash position.

Apple Inc. (NASDAQ:AAPL) has put some of this cash to work with a 2% dividend yield. The tech company has faced formidable competition in the mobile market, but still holds a solid position. IDC expects Apple’s iPhone to own 17% of the smartphone market by 2015. The stock only trades around $525, but Wall Street’s price target averages $740 and analyst Brian White of Topeka Capital Markets has a $1,111 price target on Apple.

In addition to Apple Inc. (NASDAQ:AAPL), two of AQR’s big picks are oil and gas giants, Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX), ranking second and third, respectively, in AQR’s 3Q 2012 13F. AQR upped its stake by at least 20% in each energy company and has had the stocks in its top five for almost two years. Exxon plans to target production growth of 1%-2% per through 2016, with asset base decline of 3% over the same time period. Billionaire Bill Gates is Exxon’s top fund owner of those we track with over 7.6 million shares (check out Bill Gates’ top picks).

AQR CAPITAL MANAGEMENTA couple big initiatives for Exxon have been adding acreage in Bakken and Western Canada. Exxon has been performing well, helped by strong performance in its refining segment, not to mention a greater focus on upstream deep-water opportunities. Exxon’s balance sheet remains robust with $13 billion in cash and $12 billion in debt. Recent quarterly results for 3Q 2012 also showed that cash flow continues to outpace capital expenditures, with $14 billion in cash flow compared to $9 billion in CapEx.

Chevron also managed to see cash flow ($26 billion) outpace CapEx ($21 billion) during 3Q. Chevron is targeting more robust production growth than Exxon at 4% through 2017. Chevron is also focusing on rearranging its operational structure; part of the restructuring includes the sell-off of some of its downstream operations. These plans to reduce its refining operations will allow the oil/gas company to focus on higher margin businesses, with plans to expand further into the liquid natural gas sector. Billionaire Ken Fisher – founder of Fisher Asset Management – is the top fund owner of those we track with over 3.5 million shares (check out Ken Fisher’s newest picks).

Aside from Apple Inc. (NASDAQ:AAPL), Exxon and Chevron, what other stocks are in Asness’ portfolio?

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!