Is Apple Inc. (AAPL) Starting To Lose Hedge Fund Support?

Page 1 of 2

Is Apple Inc. (NASDAQ:AAPL) losing its popularity? Hedge funds are still crazy about Apple Inc. The technology giant counted 149 hedge funds with a total stake of nearly $21 billion among its shareholders at the end of 2014. That’s a slight decline of 5 hedge funds over the fourth quarter. Some of the value-oriented fund managers indicated in our conversations that they are taking chips off the table because the easy money in Apple has been made. We will summarize the hedge fund activity in Apple below, but first let us explain why you should pay attention to hedge fund moves.


In the eyes of most shareholders, hedge funds are viewed as costly, outdated financial tools of yesteryear. They have a point. An average equity hedge fund returned slightly more than 3% last year, vs 13.5% for S&P 500 index funds. Hedge funds underperform the market because they are hedged and they charge excessively for their services. Our research has shown however, that hedge funds’ top stock picks, like Apple, historically beat the market by about 2 percentage points per year. So, there is still some value in hedge fund’s moves. David Einhorn bought this stock below $250 per share (this was before Apple’s 7-to-1 stock split last summer) and the stock has more than tripled since then (the current shares trade at an equivalent of $900, pre-split). Carl Icahn went on CNBC multiple times and told everybody that he was buying big time at a price of less than $500. Those moves proved very profitable for these hedge funds.

Keeping this in mind, we’re going to view the latest hedge fund action regarding Apple Inc. (NASDAQ:AAPL).

What does the smart money think about Apple Inc. (NASDAQ:AAPL)?

At Q4’s end, a total of 149 of the hedge funds tracked by Insider Monkey were long in this stock, a change of -3% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes significantly.

When looking at the hedgies followed by Insider Monkey, Carl Icahn’s Icahn Capital LP had the biggest position in Apple Inc. (NASDAQ:AAPL), worth more than $5.8 billion, comprising 18% of its 13F portfolio at the end of 2014. On Icahn Capital LP’s heels is Ken Fisher’s Fisher Asset Management which held a $1.19 billion position; 2.5% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Phill Gross’ Adage Capital, Philippe Laffont’s Coatue Management and David Einhorn’s Greenlight Capital. Though all three of these funds trimmed their stakes between 1% (Adage) and 16% (Coatue).

Page 1 of 2