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Apple Inc. (AAPL) Still A Top Pick Of This Fund. What Does It See?

Editor’s Note: Related tickers: Apple Inc. (NASDAQ:AAPL), Goldman Sachs Group, Inc. (NYSE:GS), Lennar Corporation (NYSE:LEN), Google Inc (NASDAQ:GOOG), eBay Inc (NASDAQ:EBAY), Toll Brothers Inc (NYSE:TOL)

Mark Asset Management was founded by Morris Mark in 1986 and grew to around $2 billion under management around the time of the tech bubble. After many of his initial investors withdrew their money from the fund, Mark resumed a low profile and has only just begun a fundraising initiative designed to grow assets under management. Before founding his hedge fund, Mark had worked under Leon Cooperman at Goldman Sachs Group, Inc. (NYSE:GS).


Mark Asset Management recently filed its quarterly 13F filing, disclosing many of its long equity positions as of the end of March. This quarter we will begin tracking its filings alongside those of hundreds of other hedge funds and notable investors in our database, which we use to develop investing strategies. We have found, for example, that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year (learn more about imitating small cap picks). Read on for our quick take on Mark’s five largest holdings or see the full list of stocks from the 13F.

The largest holding in Mark’s portfolio was Apple Inc. (NASDAQ:AAPL), as the fund disclosed ownership of about 40,000 shares. Apple Inc. (NASDAQ:AAPL) had lost its place as the most popular stock among hedge funds during the fourth quarter of 2012 to AIG (find more of hedge funds’ favorite stocks), and during the first quarter of 2013 its earnings fell 18% versus a year earlier. The stock does trade at only 11 times trailing earnings (and that’s not taking into account the sizable cash hoard) and so Apple Inc. (NASDAQ:AAPL) could be a good value if it is able to stabilize its business.

Image: Apple Inc. (NASDAQ:AAPL)

According to the 13F, Mark owned close to 420,000 shares of Lennar Corporation (NYSE:LEN) at the beginning of April. Homebuilders have done well in the market as housing data continues to be good, and the stock price is up 51% in the last year accompanying high growth on both top and bottom lines. However, a number of market players are bearish on Lennar Corporation (NYSE:LEN) as shown by the fact that 23% of the float is held short. The stock’s beta of 1.8 demonstrates how sensitive homebuilders are to general economic conditions.

Mark and his team had about 20,000 shares of Google Inc (NASDAQ:GOOG) in their portfolio at the end of Q1. Google Inc (NASDAQ:GOOG) has been another growth stock, with the company reporting 16% earnings growth in its most recent quarter compared to the same period in the previous year; net income is increasing as the company integrates Motorola Mobility Holdings and the general search business grows. However, current prices already include substantial future growth as shown by the trailing P/E of 26.

Who’s the best of the rest?