Morgan Stanley: Average Large-Cap Institutional Ownership Is Flat

After the deadline for filing Schedule 13Fs for the fourth quarter of 2014, Morgan Stanley analysts looked into the data and concluded that average portfolio allocation to large-cap tech stocks was flat, quarter over quarter.

Trends

In a report published Thursday, researchers point out some of the trends: Oracle Corporation ORCL witnessed the largest uptick, while Hewlett-Packard Company HPQ “experienced a meaningful downtick,” taking ownership to the low end of its historical range.

On the opposite, ownership stands near historical highs at eBay Inc. EBAY, Intel Corporation INTC, Microsoft Corporation MSFT and Oracle, with average ownership among top 100 shareholders above the S&P 500 benchmark -- investors are most overweight eBay relative to the benchmark.

Apple

For its part, Apple Inc. AAPL “remains the only large-cap tech name with the average fund allocation below its S&P 500 benchmark weight.” While the current weighting of Apple in the S&P 500 stands at 4 percent (a peak ownership of 4.5 percent was reached in the third quarter of 2012), the average weighting for institutional owners reaches only 2.6 percent. However, this is the highest allocation level the stock has seen since the first quarter of 2013, and represents a modest uptick from the 2.5 percent weighting for the third quarter of 2014. According to the report, “this speaks to the more favorable risk-reward than the last time shares traded above $100.”

Cisco

Cisco Systems, Inc. CSCO “saw little change in allocations while fundamentals continue to improve.”

Morgan Stanley “previously interpreted the historically low ownership as a sign of exceeding caution on the company’s revenue growth and margin expansion potential. The Company’s recent FQ2 report confirms a potentially strong 2015 product cycle, which could encourage increased allocation amongst investors in the coming quarters.”