Two Sigma Advisors 5 Top Stock Picks and their Performance against S&P 500 ETF (SPY)

1. Apple Inc. (NASDAQ:AAPL)

Two Sigma Advisors Equity Stake: $1.19 Billion

Year to Date Performance: +44%

SPDR S&P 500 ETF Trust (NYSEARCA:SPY) YTD Performance: +15.59%

Number of Hedge Fund Holders: 135

Headquartered in Cupertino, California, Apple Inc. (NASDAQ:AAPL) designs, manufactures, and sells smartphones, personal computers, tablets, wearable’s, and accessories. The company is best known for the iPhone product line and the Mac line of personal computers and wearable’s, among other hardware devices. The company also generates billions of dollars from its service segment, driven by the sale of apps on the Apple Store, Apple Music, and the Apple Arcade game subscription service.

Amid the squabbles between Siegel and Overdeck, Apple Inc. (NASDAQ:AAPL) has continued to outperform in the Two Sigma Advisors portfolio, going by the 31% gain in Q1 compared to the 6% gain of the S&P 500 ETF (SPY).

Apple Inc. (NASDAQ:AAPL) was up by 17% in Q2 against 9.9% for the ETF and down 11% in Q3, compared to a 3.6% slide for the ETF. The quant hedge fund has been buying and selling shares in the company since 2010, currently accounting for 3.02% of the portfolio.

In its Q3 2023 investor letter, Baron Technology Fund shared its insights on Apple Inc. (NASDAQ:AAPL) as follows:

“After a strong start to the year, shares of Apple Inc. partially retraced their gains this quarter. Mixed second calendar quarter financial results, with iPhone, iPad, and Wearables revenue coming in just shy of consensus expectations, coupled with elevated investor concerns about the macro economy and potential weakness in consumer spending later this year, pressured shares. Despite these quarterly fluctuations in product sales, we are encouraged by several long-term trends, including: (1) revenue from higher-margin services like the App Store, iCloud, and Apple Pay, which are growing faster than the overall business, driving better revenue visibility and higher free-cash-flow (FCF) margins; (2) continued gains in global market share in smartphones, wearables, and other hardware categories; and (3) consistent returns of capital to shareholders via share repurchases and dividends. On top of these trends in the core business, Apple is thoughtfully investing in new categories like augmented reality, search, financial services, and streaming media content. We took advantage of weakness in the quarter to add to our position in Apple.”

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