Fund ownership of IT hardware stocks is touching historical lows, according to Bank of America Merrill Lynch, which cited its tracker of U.S. large-cap active fund manager holdings. 

The Analyst

Notwithstanding waning interest among fund managers, BofA's Wamsi Mohan maintained Buy ratings on the following stocks:

• Apple Inc. (NASDAQ:AAPL)
• IBM Common Stock (NYSE:IBM)
• HP Inc (NYSE:HPQ)
• TE Connectivity Ltd (NYSE:TEL)
• NetApp Inc. (NASDAQ:NTAP)

The Thesis

The analyst shared the following sector takeaways:

See also: Loop Capital Models For 13% Upside In Apple, Speculates On 'Nirvana' iPhone Lineup

Source: BofA

Apple Poised For Continued Upside

Mohan forecast additional upside for Apple given its low average position. Apple's stock is poised for continued upside due to its multiyear revenue and gross profit dollar growth, along with its strong capital return, the analyst said. 

IBM Found Wanting In Position Size

BofA noted that IBM's relative weighting is at record low of 0.14 times, but ownership has ticked up to 20.8 percent. The firm sees increase in both ownership and relative weight to the index if the company shows improved performance in terms of pretax income in 2019, while also stemming its revenue-declining streak.

The Price Action

The SPDR S Tr/S&P Tecy HARDWARE E (NYSE:XTH) is up about 3.4 percent year-to-date.

Related Link: Goldman Sachs Adds Nutanix To Conviction List, Says Hardware Revenue Decision Is Misunderstood