Market Overview

Apple Is Under-Owned In Hedge Fund Land

Apple Is Under-Owned In Hedge Fund Land
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Apple Inc. (NASDAQ: AAPL) shares are up 1.3 percent on Tuesday, flirting with the $100 level after an upgrade from Bank of America and a new $130 price target. A major part of analysts' bullishness was related to "multiple" upside levers, including the Apple Watch, the iPhone 6s and the iPhone 7.

The note also details some peculiar activity in the hedge fund world. According to Bank of America U.S. head quant analyst Savita Subramanian, Apple is held by 71 percent of long-only funds and its average weighting is 62 percent of the S&P 500. That's "relatively underweighted," Subramanian said, adding that the stock's recent selloff could give an "opportunity" to these funds. From a macro level, this imbalance could then be corrected.

Related Link: Gene Munster Says Apple Buying Tesla For $40 Billion 'Makes A Lot Of Sense'

Bank of America's kicker line: "In our opinion, there is room for long-only funds to increase their ownership of AAPL stock." The chart below shows this imbalance.


The graph reveals, inc. (NYSE: CRM), Adobe Systems Incorporated (NASDAQ: ADBE), eBay Inc (NASDAQ: EBAY) and Hewlett-Packard Company (NYSE: HPQ) are a few potentially over-owned names. 

Also highlighted by Subramanian, Apple underperformed all of its peers in 2015, losing 4.6 percent. Alphabet Inc Class C (NASDAQ: GOOG) (46.6 percent), Facebook Inc (NASDAQ: FB) (34.1 percent), Microsoft Corporation (NASDAQ: MSFT) (19.4 percent) and, Inc. (NASDAQ: AMZN) (117.8 percent) all had significantly better years.

"Interestingly AAPL and GOOG have alternated good performance since 2012 where AAPL has outperformed GOOG one year and then underperformed the next," the analyst wrote, signaling Apple could be in for a better 2016 -- anecdotally speaking.

Latest Ratings for AAPL

Feb 2018Raymond JamesReinstatesMarket Perform
Feb 2018Goldman SachsInitiates Coverage OnNeutral
Feb 2018Hilliard LyonsUpgradesLong-Term BuyBuy

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

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