The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 28. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Apple Inc. (NASDAQ:AAPL).
Is Apple Inc. (NASDAQ:AAPL) ready to rally soon? Hedge funds are taking a pessimistic view on the margin. The number of bullish hedge fund bets went down by 3 lately. Our calculations also showed that AAPL is still loved by hedge funds, ranking 11th among the 30 most popular stocks among hedge funds. AAPL was in 95 hedge funds’ portfolios at the end of the second quarter of 2019. There were 98 hedge funds in our database with AAPL positions at the end of the first quarter.
If you’d ask most investors, hedge funds are seen as underperforming, outdated investment tools of the past. While there are greater than 8000 funds in operation at the moment, Our experts look at the masters of this group, about 750 funds. Most estimates calculate that this group of people shepherd the lion’s share of the hedge fund industry’s total capital, and by watching their unrivaled investments, Insider Monkey has brought to light many investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship hedge fund strategy defeated the S&P 500 index by around 5 percentage points annually since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a peek at the fresh hedge fund action surrounding Apple Inc. (NASDAQ:AAPL).
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s view the recent hedge fund action regarding Microsoft Corporation (NASDAQ:MSFT).
How are hedge funds trading Apple Inc. (NASDAQ:AAPL)?
Heading into the third quarter of 2019, a total of 95 of the hedge funds tracked by Insider Monkey were long this stock, a change of -3% from the first quarter of 2019. Below, you can check out the change in hedge fund sentiment towards AAPL over the last 16 quarters. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Among these funds, Berkshire Hathaway held the most valuable stake in Apple Inc. (NASDAQ:AAPL), which was worth $49.4 billion at the end of the second quarter. On the second spot was Fisher Asset Management which amassed $2719.1 million worth of shares. Moreover, Citadel Investment Group, AQR Capital Management, and Adage Capital Management were also bullish on Apple Inc. (NASDAQ:AAPL), allocating a large percentage of their portfolios to this stock.
Seeing as Apple Inc. (NASDAQ:AAPL) has experienced a decline in interest from the smart money, it’s safe to say that there were a few hedgies that decided to sell off their positions entirely by the end of the second quarter. At the top of the heap, Ric Dillon’s Diamond Hill Capital cut the biggest position of all the hedgies followed by Insider Monkey, valued at about $158.3 million in stock. Jonathon Jacobson’s fund, Highfields Capital Management, also dropped its stock, about $133 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 3 funds by the end of the second quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Apple Inc. (NASDAQ:AAPL) but similarly valued. These stocks are Alphabet Inc (NASDAQ:GOOGL), Alphabet Inc (NASDAQ:GOOG), Facebook Inc (NASDAQ:FB), and Berkshire Hathaway Inc. (NYSE:BRK-B). This group of stocks’ market valuations are similar to AAPL’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 132.5 hedge funds with bullish positions and the average amount invested in these stocks was $16.1 billion. That figure was $57.8 billion in AAPL’s case. Facebook Inc (NASDAQ:FB) is the most popular stock in this table. On the other hand Berkshire Hathaway Inc. (NYSE:BRK-B) is the least popular one with only 93 bullish hedge fund positions. Hedge funds reduced their Apple Inc. (NASDAQ:AAPL) exposure at the margin but the stock is still wildly popular. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on AAPL as the stock returned 13.6% during the third quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.