Here's Why Morgan Stanley Is Negative On Apple And Tech Sector in General

Analaysts at Morgan Stanley MS recently released a note in which they mentioned that the firm would be trimming 1% of its position in Apple Inc. AAPL. Moreover, it’s not just Apple, the analysts feel that the tech sector overall has become relatively expensive and there isn’t much opportunity for investments in the tech sector.

Adam Parker, Chief Market Strategist at Morgan Stanley, was recently on CNBC to discuss his firm’s view on tech stocks and why it is trimming exposure in the sector.

“We just downgraded tech here. Look, we use what we call quantamental discipline where we try to find stocks that recommended by Morgan Stanley fundamental analysts and actually screen well in our quant models, both our 3 and 24 month model we have that we score stocks every night on and it’s the sector right now with the least number of ideas. We think that’s telling us something,” Parker said.

“There’s expensive stocks that don’t screen very well, there’s cheap stocks that have sort of poor fundamental outlook. So, we are having trouble putting together a list of high quality ideas. I think the playbook for the first part of 2015 is actually going to be to look over some of the laggards in tech and avoid some of the winners.”

Though, Parker  didn’t specifically talked about why his firm cutting its stake in Apple was mentioned in the note, he did say, “ what we generally try to do and I think yo have seen this in the note is try to put in stocks before they double and start to reduce them as they double or go-up”