“In general, the thirty largest shareholders in a large-cap technology company own between 30 and 50 percent of the stock,” Dan Ritter reports for Wall St. Cheat Sheet. “The data can be useful to market watchers interested in understanding the level of institutional interest in a sector and for certain stocks within that sector. That is, market watchers can follow the so-called ‘smart money,’ money invested by those with expert knowledge, as opposed to ‘dumb money.'”
“Google’s relatively high institutional ownership — at 84.2 percent as of the end of 2013 — suggests a high level of interest among professional investors and traders,” Ritter reports. “In theory, these investors wouldn’t hold the stock if they didn’t believe it would perform well in the future, making their ownership a vote of confidence in the company.”
“Apple’s top thirty largest owners own a combined 30 percent of the company,” Ritter reports. “This is down from a peak of 40 percent in 2009 and below the five-year average of 36 percent. Moreover, the portfolios of the top thirty holders of Apple stock are underweight Apple relative to Apple’s weight in the S&P 500. Morgan Stanley analyst Katy Huberty has an explanation for why this is the case. ‘We view low institutional ownership relative to other large cap mobile technology stocks as underestimating Apple’s ability to participate in new categories like wearables and services,’ she said in a research note.”
Read more in the full article here.
I hope this year that it turns around with new Apple upgrades and products.
BINGO! New products are the jolt that Apple needs to get out of its current stock malaise.
Then the stock thrill addicts will be all happy and HIGH again until January 1, 2015 when the Apple Bear Bullshit begins again as they suffer from their hangovers and withdrawal.
Kids: Trying to make an addict happy is a total waste of time and only heeds their demise. Not that I’d mind their demise.
84% thinks that the house of cards that is Google is a great long term investment? Sound like the makings of another Wall St disaster story in the making.
And 30% think Apple is OK. So almost 3:1 think the P/E ratio of Google is a safer investment than the 12-13 that Apple has. The logic escapes me.
I do understand why only 30% are in Apple. Investment firms like these have never understood why Apple is and will continue to be successful. Those places look a quantity not quality. They all think Google’s incessant buying of every other thing, and throwing stuff at the walls to see what sticks is where the investment should be. You can’t argue with Google’s stock price success, but at the first sign of recession and budget cutbacks, advertising is the first to go belly up. But people will still make buying choices of well designed hardware and software regardless of economic conditions as those things become obsolete and need to be replaced.
Sorry about too many “makings” in there. Can’t edit.
Smart money means professional investors who ONLY care about what they believe will make them a profit. Dumb money is the rest of us who invest in Apple because we believe in Apple’s mission.
I have a feeling, that in the long-term, us “dummies” will prove to be the smart ones, and the “smart” ones will only prove to be greedy AND stupid.
No. What you refer as “smart money” is the group of traders which only look at short term profit potential. Real “smart money” represent people who understand that Apple is a safe investment for medium and long term horizons.
If you were leaving for say 10 years with no possibility of intervening in your portfolio, which stock would you pick to avoid worriing?
For my part, I would choose Apple (and I have) because it’s not how the market views this stock that counts, it’s how the company will conquer new markets profitably in the future, and Apple master’s this art better than any other company.
“’Google’s relatively high institutional ownership — at 84.2 percent as of the end of 2013 — suggests a high level of interest among professional investors and traders,’ Ritter reports.”
And this is supposed to be the “smart money”? I’ve spent the last 15 years as an Apple investor watching that “smart money” predict Apple’s demise. Where were they when the share price was $7? In denial. Where were they when it was $30? In denial. The institutional investors didn’t get involved with Apple in a big way until it had already doubled a few times. Then they jumped on the bandwagon, as they have now with Google. There’s a reason they average single digit returns on their money, and it’s definitely not because they are the “smart money”.
You would think that people would learn from the financial disasters of the last decade but then fools rarely regain sanity for long. It’s all about perception and that perception like the banks may be built on porridge for all the logic of it. I do. Odd though that Apples percentage of these so called significant investors was never that much higher than now (and well below Googles and its Emperors clothes type of growth), despite the company being massively at the forefront of all things growth for so long so probably not too significant in reality.
even more upsetting to me is the fact google makes less in a year than apple makes in a quarter . i thought you keep score in business by the actual size of the bank account . apparently the smart money thinks loosing less than expected trumps the fat wallet and no debt, (go figure)
that said i do have a short bias on apple till sept but it really hurts to hit the sell button
Seems like the “smart” money may also shy away from a stock with as much historic volatility as AAPL. Yeah, they want their stocks to double as much as everyone else, but they also can afford to have one of their larger holdings drop like a rock for no reason. Kind of a chicken-egg situation. They don’t want to invest because of potential volatility, but that may also be one cause of it.
CAN’T afford
I’m all for continuing to buy back stock vs more dividend. I’d be happy to see 50% of the current open shares be repurchased by Apple.
i’d be happy with 100% repurchased, as long as mine are the last to be sold, and they would! then apple could concentrate on their insanely great tech and ignore the noise
Professional and smart are not the same thing!
Specially at wall street !
The difference between Apple and Google is that Google publicizing all of its products regardless it can be widely used or just sling shots but Wall Street likes that strategy instead keeps thing under wrap like Apple. Even though Apple is making a lot of money on this planet. The announcement of Apple CarPlay and Mobil payment should be a big catalysts for
AAPL, but it could not move a needle.
If I were an institutional investor, especially someone in charge of something like retirement funds, I’d shy away from Apple as well, not because they didn’t make the best products in the world, but because you’ve all these shitheads from Icahn to Buffett, to bottom feeders at Speaking Alpha, to the freaking shoeshine boy constantly bitching and screwing with the value of the stock and every moron pundit in the universe complaining that the company is going out of business because they don’t introduce cold fusion level black swan products every Thursday.
Apple is in the crosshairs of the worst peanut gallery of self interested short sighted dicks ever. As an institutional investor, I’d never go near it.
Did I mention the U.S. Government as well?
I object to your lumping Carl Icahn and Warren Buffet into the same group. I think if the Warren Buffets and John Bogles of the world dominated the investment management scene things would be a lot more sane. Carl Icahn, Mitt Romney, day traders and other bloodsuckers could fall off the face of the earth tomorrow and it would be a better place.
And I understand your general concern about the effects of the peanut gallery but I do think sanity and rational thought prevail over the long term.
OBTW, you have and extra “sighted” in your last paragraph.
Maybe investors should take a contrarian view. After all, if the “top investors” have already pulled back from Apple and the multi-year “Apple can’t innovate and is doomed” FUD train has done its job, then AAPL should be about as low as it is going to get in a sane market (barring disruptive global events like Russia invading Ukraine).
if the market has thrown everything at AAPL and it has stabilized around $530 then, perhaps, there is still a lot of upside potential in the stock. Perhaps…
Meanwhile, I am collecting and reinvesting a pretty decent dividend.
View this as an opportunity. That there is a relative “lack” of institutional investors in Apple stock means if (and I believe, when) the company comes up with its next big thing, that the big boys will come rushing in (fair weather friends that they are). A big surge in institutional buyers could cause Apple stock to zoom up.
As it is, institutional investors think in terms of the moment or the quarter. Smaller investors tend to be more long-term holders of a company’s stock. If you read the stockholder letters of Warren Buffett (required reading for any investor), he counsels the smaller investor to find great companies whose book value per share will grow over time and hold on to the stock. He also advises you to tune out the daily noise and be content to let the company work its magic. Last I checked, that philosophy worked pretty well for Mr. Buffett.
As noted, Wall Street does not think that way, and their focus is on rapid turnover of their stock holdings. But small investors are smarter to not get in and out of stocks frequently – the added costs of buying and selling will, over time, really erode your returns. Add to that if you reinvest your dividends, over the long term, that will compound into a lot of money.
Yesterday, Wall Street was in a tizzy about the Ukraine, and the market dropped like a boat anchor. Instead of worrying, smart investors use that as an opportunity to buy stocks at a discount. If you think the opposite of how Wall Street behaves, you can often profit handsomely. And in the case of Apple, acting contrary to the herd can make you a tidy profit.
I’ll point out that back when I originally bought Apple (in 2003), nearly every “professional analyst” (you know, the “smart money” people) had a rating of “SELL” on them.
We’ve seen how that has turned out. I’m up something like 4800% and anyone who listened to the “smart money” missed out.
On the flip side, I bought into Winstar and PSINet back in 1999 or 2000, when ALL of the “professional analysts” (you know, the “smart money”) had a “STRONG BUY” rating on both companies…..and both went bankrupt less than 2 years later.
I also sold SCSS (“Select Comfort Sleep Systems”) back in 2009 because every analyst out there was screaming “THEY’RE GOING BANKRUPT!!!!!” With the market as a whole taking a serious nosedive, I sold to “cut my losses” (SCSS hadn’t been doing well). However, as of today, SCSS is up around 3000% from where I sold them….at the “smart money” recommendation (that was the last time I listened to analysts at all).
In general, I’ve mostly lost money LISTENING to the analysts, but fortunately I’ve made much more by IGNORING them.
Your mileage may vary, but I’ve found that the “pros” are most often either (a) stating the obvious, (b), late to the game or (c) completely wrong.
As soon as apple is moving again, smart money will take notice. smart money does not like to be parked in a stock that is not moving.
The good thing about this whole apple stock debacle is that is has got me and other investors to diversify, allowing other companies to capitalize and other industries to thrive, without the knee-jerk “put it in apple”. Investment advisors are forced to do some work for a living.
Institutional investors will put their money back in AAPL soon.
You should always be diversified.
“Smart” money?
So where is ‘smart’ money investing?
– The Google balloon.
– The Amazon balloon.
– The Samsung balloon.
– Ad nauseam.
The pins to pop the bubbles? When will they arrive? I wonder.
Stupid money.