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Is Apple Inc. (AAPL) Going to Kill These Hedge Funds?

Apple Inc. (NASDAQ:AAPL) is one of the most controversial stocks on the markets today. It has seen a large drop in aggregate hedge fund interest this past quarter, which we’ll discuss shortly, but major players like Carl Icahn have jumped on board. Here’s a full list of the five biggest Apple bulls, who each seem to be invested in their own reason, from technical bullishness to straight-up value.


If you’d ask most market participants, hedge funds are viewed as slow, outdated investment vehicles of years past. While there are over 8000 funds with their doors open at present, we look at the leaders of this group, around 450 funds. It is widely believed that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by watching their top picks, we have uncovered a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 33 percentage points in 11 months (see the details here).

Just as beneficial, optimistic insider trading sentiment is a second way to parse down the marketplace. As the old adage goes: there are many incentives for an insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this method if shareholders know what to do (learn more here).

With all of this in mind, it’s important to take a look at the key action encompassing Apple Inc. (NASDAQ:AAPL).

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

In preparation for this quarter, a total of 123 of the hedge funds we track held long positions in this stock, a change of -17% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably.

According to our comprehensive database, Ken Griffin’s Citadel Investment Group had the biggest call position in Apple Inc. (NASDAQ:AAPL), worth close to $1.9421 billion, accounting for 3.4% of its total 13F portfolio. On Citadel Investment Group’s heels is D E Shaw, managed by D. E. Shaw, which held a $1.4017 billion position; 2.6% of its 13F portfolio is allocated to the company. Other peers that are bullish include David Einhorn’s Greenlight Capital, Philippe Laffont’s Coatue Management and Ken Fisher’s Fisher Asset Management.

Apple Inc. (NASDAQ:AAPL)

Since Apple Inc. (NASDAQ:AAPL) has experienced a declination in interest from the entirety of the hedge funds we track, logic holds that there was a specific group of fund managers who sold off their full holdings at the end of the second quarter. It’s worth mentioning that Tiger Global sold off the biggest investment of all the hedgies we watch, worth an estimated $115.1 million in stock. Robert Pitts’s fund, Steadfast Capital Management, also said goodbye to its stock, about $80.2 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 25 funds at the end of the second quarter.

What have insiders been doing with Apple Inc. (NASDAQ:AAPL)?

Bullish insider trading is best served when the company in question has seen transactions within the past six months. Over the last 180-day time period, Apple Inc. (NASDAQ:AAPL) has experienced zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Apple Inc. (NASDAQ:AAPL). These stocks are Hewlett-Packard Company (NYSE:HPQ), Google Inc (NASDAQ:GOOG), International Business Machines Corp. (NYSE:IBM), Microsoft Corporation (NASDAQ:MSFT), and Dell Inc. (NASDAQ:DELL). This group of stocks belong to the personal computers industry and their market caps resemble AAPL’s market cap.

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