Is Apple Inc. (AAPL) Stock A Buy Or Sell?

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on December 31st. We at Insider Monkey have made an extensive database of more than 887 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Apple Inc. (NASDAQ:AAPL) based on those filings.

Is Apple Inc. (AAPL) stock a buy or sell? AAPL shareholders have witnessed an increase in hedge fund sentiment recently. Apple Inc. (NASDAQ:AAPL) was in 146 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 152. Our calculations also showed that AAPL ranked 10th among the 30 most popular stocks among hedge funds (click for Q4 rankings).

In the eyes of most market participants, hedge funds are viewed as underperforming, outdated financial tools of the past. While there are over 8000 funds trading at present, We choose to focus on the masters of this group, around 850 funds. These hedge fund managers oversee bulk of the hedge fund industry’s total asset base, and by tracking their top stock picks, Insider Monkey has discovered several investment strategies that have historically outrun Mr. Market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 11 short targets in our latest quarterly update .

Jeffrey Talpins of Element Capital

Jeffrey Talpins of Element Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage (or at the end of this article). Now let’s analyze the key hedge fund action surrounding Apple Inc. (NASDAQ:AAPL).

Do Hedge Funds Think AAPL Is A Good Stock To Buy Now?

At fourth quarter’s end, a total of 146 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from one quarter earlier. On the other hand, there were a total of 119 hedge funds with a bullish position in AAPL a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is AAPL A Good Stock To Buy?

More specifically, Berkshire Hathaway was the largest shareholder of Apple Inc. (NASDAQ:AAPL), with a stake worth $118 billion reported as of the end of December. Trailing Berkshire Hathaway was Fisher Asset Management, which amassed a stake valued at $8130.6 million. Millennium Management, Adage Capital Management, and AQR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Berkshire Hathaway allocated the biggest weight to Apple Inc. (NASDAQ:AAPL), around 43.61% of its 13F portfolio. Element Capital Management is also relatively very bullish on the stock, earmarking 22.08 percent of its 13F equity portfolio to AAPL.

As one would reasonably expect, key money managers were breaking ground themselves. OZ Management, managed by Daniel S. Och, assembled the biggest position in Apple Inc. (NASDAQ:AAPL). OZ Management had $301.9 million invested in the company at the end of the quarter. Jeffrey Talpins’s Element Capital Management also initiated a $211.4 million position during the quarter. The other funds with brand new AAPL positions are Chris Rokos’s Rokos Capital Management, Dmitry Balyasny’s Balyasny Asset Management, and Lei Zhang’s Hillhouse Capital Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Apple Inc. (NASDAQ:AAPL) but similarly valued. These stocks are Microsoft Corporation (NASDAQ:MSFT),, Inc. (NASDAQ:AMZN), Alphabet Inc (NASDAQ:GOOG), Alphabet Inc (NASDAQ:GOOGL), Alibaba Group Holding Limited (NYSE:BABA), Facebook Inc (NASDAQ:FB), and Visa Inc (NYSE:V). All of these stocks’ market caps match AAPL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MSFT 258 52899029 24
AMZN 273 51531301 28
GOOG 157 20579318 7
GOOGL 179 21902583 17
BABA 156 17892090 -10
FB 242 38233910 12
V 166 23599162 6
Average 204.4 32376770 12

View table here if you experience formatting issues.

As you can see these stocks had an average of 204.4 hedge funds with bullish positions and the average amount invested in these stocks was $32377 million. That figure was $141811 million in AAPL’s case., Inc. (NASDAQ:AMZN) is the most popular stock in this table. On the other hand Alibaba Group Holding Limited (NYSE:BABA) is the least popular one with only 156 bullish hedge fund positions. Compared to these stocks Apple Inc. (NASDAQ:AAPL) is even less popular than BABA. Our overall hedge fund sentiment score for AAPL is 45.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Hedge funds dodged a bullet by taking a bearish stance towards AAPL. Our calculations showed that the top 20 most popular hedge fund stocks returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7% in 2021 through March 12th but managed to beat the market again by 1.6 percentage points. Unfortunately AAPL wasn’t nearly as successful as these 30 stocks (hedge fund sentiment was very bearish); AAPL investors were disappointed as the stock returned -8.7% since the end of the fourth quarter (through 3/12) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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