Morgan Stanley: Institutional investment in Apple at a 5-year low

“Apple (AAPL) is an outlier in a major shift of stock ownership that’s unfolded over the past five years, according to a note issued Wednesday by Morgan Stanley’s Katy Huberty,” Philip Elmer-DeWitt reports for Fortune.

“Looking at the really big money — the top 30 shareholders who tend to hold 30-50% of shares outstanding — Morgan Stanley found big-money ownership to be at or near record highs for several stocks: Amazon (AMZN), Google (GOOG), Microsoft (MSFT) and Hewlett-Packard (HPQ),” P.E.D. reports. “In contrast, the big 30 shareholders currently own what Huberty describes as ‘a record low’ 30% of Apple, compared with the 36% five-year average and a peak of 40% in 2009.”

Read more in the full article here.

29 Comments

    1. There was a time when the major determinant of stock price was the financial performance of the company. Obviously, that is no longer the case, as you can see from Huberty’s analysis as to who owns what. Now the major determinant of stock price is artificial manipulation driven by hedge funds and analyst FUD. To the detriment of AAPL, at least in the short run.

    2. I gave you one star, not just because you used “doomed” in your post (and were serious), but also because you hijacked the handle of the real, registered “CupertinoJoe” and left out the “o.”

      By the way, that is the same letter that your girlfriend is missing.

  1. Hello Timmy and the Apple board. Are you giving investors like me any reason to stay? Been too “patient” and put off my retirement another year. Now, even I am starting to diversify my 401K until I think the Apple team is back in the game.

    Yes, I know there is a lot going on and being established at Apple. I know because I dig to figure it out. This isn’t like a “Field of Dreams”, “If you build it they will come”. It is called PR, evangelize a little, PUT SOME REAL APPLE QUALITY TV ADS OUT!!!! Give an interview inside one of the billion dollar server farms and tell them it is like an Easter Egg Hunt. Find the others all around the world that we are building. Then ask the twits, “What do you think we are going to do with all these server farms on each continent all around the world? Drive the mystery and excitement. Yes, Steve Jobs died but Apple lives on!

    Engage or get out of the way so someone else at Apple can!!!

    1. “Back in the game”? Therein lies your problem. It’s not the fault of AAPL. It’s your fault. What? Soon as Apple has some good news and the stock jumps up a bit you’ll be all in again? “Even you will diversify your investments”? You should always diversify your investing. And after being slammed by AAPL in the last 17 months you have learned nothing. Put off your retirement? Again? You should’ve retired two years ago. Had you been diversified and also taken your profit in AAPL when substantially ahead, you’d be enjoying life. Only you control your investment. If you make mistakes it’s not the fault of others. Or an individual company that you may invest in. Stocks go up. Stocks go down. All of them. No exceptions. Investing your money in any company and letting it ride forever is not a plan. But it’s clear that you will jump into Apple with both feet with no thought of what has happened to you in the past. As adults we are supposed to learn from our past mistakes. I would think that working an extra two years would be a hard lesson to ignore.

  2. Well, you can’t say it hasn’t been a good move on their part. Apple has been dead money for 18 months while the other stocks noted in the article have run.

    Let’s face it…..for a company with $160b in the bank, they seem to have no ability to use it for any advantage. It sits in t-bills earning 75bps a year. They have been passed up in innovation by many other companies. For goodness sakes, they can’t even get a large screen phone out 3 years after they hit the market.

    What good is all that cash when u can’t deploy it to high ROI initiatives. That’s the compelling reason for returning it to shareholders. They aren’t using it, it doesn’t earn anything, and it provides them with no leverage in simple iterations like a bigger screen phone.

    I’m exasperated with being an Apple shareholder. I’ve sold more than half of my long term position and don’t see anything that compels me not to sell the other half.

        1. My brainstorm list in the opposite direction:
          – Touch ID (Oh look, Samsung’s trying to rip it off).
          – Precision cut aluminum chassis for computer gear.
          – The new Mac Pro’s design, cooling system, quietness, usability, expandability philosophy.
          – Recent patents in a wide variety or new user interactive technology from touch to gesture to 3D.
          – 64-bit A7 CPUs in iOS devices. (Oh look, the competition is just now attempting to catch up).
          – Encrypted FaceTime video and now audio.
          – XProtect and Gatekeeper system security technology.
          – Removal of both Flash and Java, the two most dangerous Internet technologies of our time, from OS X and iOS.
          – Research and patenting of Liquid Metal™ technology.
          – Upcoming use of sapphire glass technology.
          – The Apple TV GUI and simple remote, not to mention AirPlay.
          – AirPrint.
          – The white balance matching flash system on the iPhone 5S (Still years ahead of competitors).

          *Brain smoking* I could start remembering further back in time, but that’s not the point.

          Further adds to the list? . . .

  3. Morgan Stanley found big-money ownership to be at or near record highs for several stocks: Amazon (AMZN), Google (GOOG), Microsoft (MSFT) and Hewlett-Packard (HPQ)

    I was must chatting somewhere about how there’s lots of oblivious going around these days.

    I personally cannot imagine investing in ANY of those four stocks. Two balloons. Two in FAIL mode. Brilliant investing Morgan Stanley. Is this due to your coke addiction? Or are you technology illiterate?

  4. Apple must be judged upon it’s own beliefs, struggles, history and results. Just as you must be judged. There is only folly in judging Apple by the criteria of the speculators and panderers of Wall Street. Whose unbridled greed will flush companies and even countries to the yellow river.

          1. AAPL Net Income
            FY10Q1: 9.36B
            FY11Q1: 16.64B
            FY12Q1: 32.98B
            FY13Q1: 41.75B
            FY14Q1: 37.03B

            AAPL Revenue
            FY10Q1: 15.68B
            FY11Q1: 26.74B
            FY12Q1: 46.33B
            FY13Q1: 54.51B
            FY14Q1: 57.59B

            AAPL Market Capitalization
            12/31/09: 190.98B
            12/31/10: 297.09B
            12/30/11: 377.52B
            12/31/12: 499.70B
            12/31/13: 500.74B

  5. This is a by product of apple’s recent buy back program. Who sold? The institutions. Who bought? Apple. Morgan Stanley can’t put two and two together? Shocker.

    Diluting institutional stock holdings is a great strategy for apple, as they will have less and less power to manipulate the stock… which, arguably, has been the real reason AAPL has suffered so much over the past couple years.I think we’ll start seeing this pay off big time in the next year.

  6. Personally, I think this is a reason to be optimistic. Apple stock is being priced as if the company will never grow again, nor will the company ever introduce another category-defining product. Apple’s valuation is based on sentiment, not its fundamentals.

    That may frustrate fanboys like us. But the patient investor realizes that when (and not if) Apple comes up with that next one more thing, that the institutions will come flooding back. To patient investors, that will result in a swift and hefty bump in Apple’s stock price.

    Please remember that greed, fear and impatience rule Wall Street. You need only read the parts of the 2014 Berkshire Hathaway annual report letter written by Warren Buffett to understand why patience matters. In his letter, Buffett describes his investment in a Nebraska farm. Compared to other investments, it’s not a fast growing asset. But over time, that little farm has generated a tremendous return on his investment.

    The point is to be patient. If you hold Apple stock, or any other stock, don’t freak out because of one day’s hysteria. At some point, the sentiment will shift back to Apple’s favor, and your patience will be rewarded. Warren Buffett ignores all the noise from Wall Street. And last I checked, he’s done pretty well as a result. It’s something he advises to the small investor, and it’s important advice.

    Hubert is on to something. She is bright enough to see that many institutions act like sheep, and that it’s an opportunity for the patient contrarian investor. If you can tune out the noise and be patient, you will be the one smiling.

    The greatest weapon you have against the big Wall Street houses and hedge funds is patience. They have to constantly churn stock holdings, but you don’t. And if you look at the return on investment of most hedge funds, you can completely blow them away.

    So be patient. The wind will shift your way. In the mean time, take advantage of reinvesting your Apple stock dividends. Over time, that alone will make you a lot of money.

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