“Apple continues to see flight from institutional holders,” Mike Thiessen writes for The Motley Fool. “Fidelity Contrafund, the largest shareholder of Apple, cut its position by 10% through the first two months of 2013. It now holds 10.43 million shares of Apple, a $4.41 billion position. The fund’s new number one position is Google at 5.8% of assets–Apple now accounts for 5.2% of fund assets.”
“Fidelity Contrafund’s investment strategy focuses on large cap growth stocks and value stocks that it feels are undervalued based on fundamentals,” Thiessen writes, “Apple is clearly a laggard and the only stock among them that is down year-to-date.”
Thiessen writes, “The reduction in the position by Apple’s largest holder is something of a concern for other investors. First, the fund holds a lot more shares, and shares face a headwind if it plans to continue trimming the size of its position, or worse, exit the position altogether. Second, although the stock has sold off significantly and many consider it a value at current levels, apparently that list does not include its largest shareholder.”
“For investors with patience and a longer investment horizon that are not trying to outperform on a twelve month but lifetime basis, this can create an opportunity,” Thiessen writes. “An investor should look for the point where the shares of Apple appear to have stabilized, but this is harder than it sounds. Often it makes sense to miss the first 10%-15% of a stock bouncing back to be sure you are not catching that falling knife.”
Read more in the full article here.