The last 13F reporting period has passed and Insider Monkey has gone through 823 13F filings that well-known hedge funds and value investors are required to file by the SEC. The 13F filings show the portfolio positions of funds and investors as of June 30, when the S&P 500 index was trading around the 3100 level. Since late March, investors have decided to bet on the economic recovery and a stock market rebound. The S&P 500 index has returned more than 50% since its low. In this article, you’ll find out whether hedge funds thought Apple Inc. (NASDAQ:AAPL) was a good investment heading into the third quarter and how the stock has traded against top hedge fund picks. .
Apple Inc. (NASDAQ:AAPL) was in 128 hedge fund portfolios at the end of June. The all-time high for these stats is 152. The AAPL has recently seen an increase in support from the world’s most elite fund managers. There were 123 hedge funds in our database with AAPL holdings at the end of March. Our calculations also showed that AAPL ranked 11th among the 30 most popular stocks among hedge funds (click for Q2 rankings and watch the video for a quick look at the top 5 stocks).
Video: Watch our video on the 5 most popular hedge fund stocks.
Why do we pay any attention to hedge fund sentiment? Our research has shown that a select group of hedge funds have outperformed the S&P 500 ETFs by 56 percentage points since March 2017 (see details here). We have also been able to identify a select group of hedge funds in advance that will significantly underperform the market. We have been following and sharing the list of these stocks since February 2017 and they have lost 34% until August 17th. This is why we believe that hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to discover the next big investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we’re looking at ideas like this stock under the radar to identify the next tenbagger. Currently, investors are pessimistic about commercial real estate investments. So we check this game against the tide diversify our market exposure. Although we recommend positions in only a tiny fraction of the companies we review, we check as many stocks as possible. We read letters from hedge fund investors and listen to stock presentations at hedge fund conferences. If you want to check out the best healthcare stock to buy right now, you can check out our latest hedge fund manager interview here. With all of that in mind, let’s take a look at recent hedge fund action regarding Apple Inc. (NASDAQ:AAPL).
How did the hedgies trade Apple Inc. (NASDAQ:AAPL)?
Heading into the third quarter of 2020, a total of 128 of the hedge funds tracked by Insider Monkey held long positions in this security, a change of 4% from the first quarter of 2020. Below you can see the change of hedge funds. sentiment toward AAPL over the past 20 quarters. With hedgie positions undergoing their usual ebb and flow, there is a select group of key hedge fund managers who were significantly increasing their stakes (or had already accumulated large positions).
According to publicly available data on hedge funds and institutional investors compiled by Insider Monkey, Berkshire Hathaway, managed by Warren Buffett, holds the number one position in Apple Inc. (NASDAQ:AAPL). Berkshire Hathaway holds an $89.4328 billion position in stocks, representing 44.2% of its 13F portfolio. The second largest holding is held by Fisher Asset Management, led by Ken Fisher, which holds a $5.221 billion position; the fund has 5.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism include Ken Griffin’s Citadel Investment Group, Cliff Asness’ AQR Capital Management and DE Shaw’s DE Shaw. In terms of portfolio weights assigned to each position, Berkshire Hathaway assigned the largest weighting to Apple Inc. (NASDAQ:AAPL), approximately 44.18% of its 13F portfolio. White Square Capital is also relatively bullish on the stock, designating 26.07% of its 13F stock portfolio to AAPL.
Therefore, specific fund managers were innovating themselves. Tairen Capital, managed by Larry Chen and Terry Zhang, was the largest holding in Apple Inc. (NASDAQ: AAPL). Tairen Capital had $115.1 million invested in the company at the end of the quarter. John Hurley’s Cavalry Asset Management also initiated a $33.9 million position during the quarter. The following funds were also among AAPL’s new investors: Alta Park Capital of Bijan Modanlou, Joseph Bou-Saba and Jayaveera Kodali, White Square Capital of Florian Kronawitter and Centiva Capital of Karim Abbadi and Edward McBride.
Now let’s review hedge fund activity in other stocks similar to Apple Inc. (NASDAQ:AAPL). We will be looking at Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc (NASDAQ:GOOGL), Alphabet Inc (NASDAQ:GOOG), Alibaba Group Holding Limited (NYSE:BABA), Facebook Inc (NASDAQ:FB), Berkshire Hathaway Inc. (NYSE: BRK-B) and Visa Inc. (NYSE: V). All market caps of these stocks resemble the market cap of AAPL.
[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of HF position AMZN,248,43217853,-3 GOOGL,157,13533499,-10 GOOG,144,14761874,-3 BABA,154,24386257 ,-13 FB,210,25222524,-3 BRK-B,107,15633556,-8V,154,17010420,-3 Average,167.7,21966569,-6.1 [/table]
Check the table here if you are having formatting issues.
As you can see, these stocks had an average of 167.7 hedge funds with bullish positions and the average amount invested in these stocks was $21.97 billion. This figure was $106 billion in the case of AAPL. Amazon.com, Inc. (NASDAQ:AMZN) is the most popular stock in this chart. On the other hand, Berkshire Hathaway Inc. (NYSE:BRK-B) is the least popular with just 107 bullish hedge fund positions. Apple Inc. (NASDAQ:AAPL) isn’t the least popular stock in this group, but hedge fund interest is still below average. Our overall hedge fund sentiment score for AAPL is 52.7. Stocks with a higher number of hedge fund positions relative to comparable stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that the 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 28.2% in 2020 through August 24 and still beat the market by 20.6 percentage points. Hedge funds were also right to bet on AAPL, as the stock has returned 38.3% since the end of June and outperformed the market by an even bigger margin.
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Disclosure: none. This article originally appeared on Insider Monkey.