Apple investors need patience

“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.

33 Comments

    1. Apple needs to start getting their attorneys out and getting after the so-called “industry analyst” that make claims about Apple’s future with absolutely no facts to back them up. I am telling you the money trail on all these doomsday predictions for Apple lead back to Redmond and Seoul. Maybe we should let that little creep from the North bomb them into the stone age.

  1. There probably is some Wall Street math major that has concocted an elaborate Ponzi scheme involving Apple stock, and the SEC and FBI don’t have a clue.

    1. There’s no scheme involved at all.

      Fidelity has been holding those shares for about 10 years. The period described had an average price of ~$440.

      Selling at that price and putting the money to work elsewhere, then reversing the strategy after earnings could easily yield $60 million in additional post tax profits.

  2. Let’s just tell it the way it is.

    I’m a big Apple fan, but Tim Cook needs to go. This clown has driven Apple into the ground, much like Ballmer has done to MS.

    There are so many interesting products he could’ve released but didn’t… for fear of failure.

    A CEO has to have the balls to make those tough decisions. I suppose that Tim is on the bottom in his “partnership”.

    1. Oh, really? What are all those interesting products that Tim Cook hasn’t released? Do you have a magic ball that sees into Apple’s HQ? I suppose you could do a better job than Tim. Too bad your still living in your parent’s basement and will never run a business 1 billionth the size of Apple.

      Tim Cook is doing a great job running Apple. THe stock is down because idiots like you believe all the stupid rumors rather than the facts.

      1. Have you not been paying attention. These very forums have spent over 2 years discussing vaporware like Apple TVs and iWatches that MDN, or somebody, apparently thinks will be huge hits. Apple hasn’t delivered above expectations on any product in the last 3 years.

        Slow and predictable is not the Apple we came to know and love. I blame its leadership.

    2. I am curious why you aren’t more appropriately attacking Steve Ballmer who is the CEO most worthy of a good drop kicking out the nearest exit. Your blatherings about Tim Cook reveal an intense ignorance and radically poor reading of what’s truly going on.

      1. Peter, do you understand that in civil discourse, if you accuse someone else of ignorance, then it is incumbent on you to inform him what you _think_ he is missing?

        Please do not be so arrogant to assume that just because someone else sees other facets of a complex issue that they are ignorant of the points that you see. That would be a typical Limbaugh ploy: my opinions are more important than your facts because my simplistic options are popular.

    3. Your viewpoint strongly echos a bias against Tim because he isn’t Steve Jobs. That’s common. People want Tim to be more like Steve, but that’s not the reality. Tim is running Apple differently and at a seemingly slower pace. There’s been gaps in time when no keynotes are held, no new products released, and intense silence. But don’t mistake this for Apple’s being driven into the ground. You’ll see next week just how successful Apple has been in the last quarter.

      1. -45% market cap is a much bigger problem than “Tim is not Steve”. If Tim can’t perform, then he needs to return his insanely over-generous stock options and go back to a job that he can do.

    4. I intend this with all sincerity:

      Fuck off.

      The idiotic idea that Apple, or any company, needs to cater to the fickle whiners in the financial press is as ludicrous as it is insane. Especially when these hysterical demands are made in defiance of the fact that Apple is one of the most profitable and successful tech companies in history. It’s time to put to rest the bleeding edge stupidity of pretending that Wall Street and its propagandists have any real insight regarding Apple. They certainly contribute absolutely nothing to making Apple a success.

  3. Fidelity can afford to reduce shares and risk without worry since it has ( self authorized in the smallprint of the brokerage agreement) all it’s margin customer’s shares to play with and lend to speculator options gamblers and shorts.

    It makes money and many shares back parasitically that way, to ofset the shares it dumped…

  4. I’ve had patience!
    She was lovely!!
    I almost married her!!!
    But then I lost her in a department store!!!!
    Oh! What could have been!
    We had planned on having at least four kids, two girls and boys in that order.
    We had developed a business plan for a hospitality & catering business.
    Our motto was:- “With patience, we can rule the world”.
    But then, error of errors, the department store we went to was owned by Mr. Pockets, Deep Pockets!!!
    he took one look at her and offered her a life where patience would not be required to realise her dreams, and that was me gone! I couldn’t compete! Not even good nookie could trump deep pockets!!!
    People, bloggers, please learn from my experience!!!
    Now, you may ask what relevance this has to the headline and story above? Nothing! Yes, absolutely nothing!! Because as you all know by now….I Have Lost The Plot!!!

      1. I have devised the best ruler in the world. All I needed to do was crowd source some capital to manufacture my ‘best ruler in the world’ which I would then have sold as the ubiquitous most accurate ruler in the world, hence ruling the world. Then I would have been able to measure out a plot. Now all I have is a lost plot! How sad!!

  5. Knee jerk reaction without reading the article: BS nobody is holding investor money hostage, or forcing them to keep it in AAPL. If they are not ‘happy’ comforted’ ‘patient’ or ‘satisfied’ thet are completely free to cash out, sell the stock, and buy something else. just. that. simple.

  6. Fidelity.

    noun

    faithfulness to a person, cause, or belief, demonstrated by continuing loyalty and support: he sought only the strictest fidelity to justice.

    Fidelity sold AAPL and bought GOOG.

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