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Hedge Funds Snapped Up Apple Inc. (AAPL) Shares At The Right Time

We at Insider Monkey have gone over 752 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Apple Inc. (NASDAQ:AAPL) based on that data.

Is Apple Inc. (NASDAQ:AAPL) a cheap investment today? The smart money is getting more optimistic. The number of bullish hedge fund bets went up by 16 in recent months. Our calculations also showed that AAPL ranked 9th overall among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

AQR CAPITAL MANAGEMENT

Let’s take a look at the fresh hedge fund action encompassing Apple Inc. (NASDAQ:AAPL).

Hedge fund activity in Apple Inc. (NASDAQ:AAPL)

At the end of the third quarter, a total of 111 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. By comparison, 112 hedge funds held shares or bullish call options in AAPL a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

AAPL_nov2019

More specifically, Berkshire Hathaway was the largest shareholder of Apple Inc. (NASDAQ:AAPL), with a stake worth $55732.4 million reported as of the end of March. Trailing Berkshire Hathaway was Fisher Asset Management, which amassed a stake valued at $3144.9 million. AQR Capital Management, Adage Capital Management, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios. In terms of the portfolio weights assigned to each position Berkshire Hathaway also allocated the biggest weight to Apple Inc. (NASDAQ:AAPL), around 26% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, allocating 9.2 percent of its 13F equity portfolio to AAPL.

With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Alkeon Capital Management, managed by Panayotis Takis Sparaggis, initiated the most valuable call position in Apple Inc. (NASDAQ:AAPL). Alkeon Capital Management had $537.5 million invested in the company at the end of the quarter. Brian Ashford-Russell and Tim Woolley’s Polar Capital also made a $224 million investment in the stock during the quarter. The following funds were also among the new AAPL investors: Anand Parekh’s Alyeska Investment Group, Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital, and Brandon Haley’s Holocene Advisors.

Let’s also examine hedge fund activity in other stocks similar to Apple Inc. (NASDAQ:AAPL). These stocks are Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc (NASDAQ:GOOGL), Alphabet Inc (NASDAQ:GOOG), and Berkshire Hathaway Inc. (NYSE:BRK-B). This group of stocks’ market values are closest to AAPL’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AMZN 168 22964901 5
GOOGL 147 12321541 18
GOOG 136 15584517 10
BRK-B 99 22272006 6
Average 137.5 18285741 9.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 137.5 hedge funds with bullish positions and the average amount invested in these stocks was $18286 million. That figure was $64813 million in AAPL’s case. Amazon.com, Inc. (NASDAQ:AMZN) 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 99 bullish hedge fund positions. Apple Inc. (NASDAQ:AAPL) is not the most popular stock in this group but hedge fund interest is extremely bullish. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Hedge funds were also right about betting on AAPL as the stock returned 17.2% during Q4 (through 11/22) and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.

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