Bloomberg’s misleading report about institutional investors’ Apple stock sales

Institutional investors haven’t been this skeptical on Apple Inc. since at least the financial crisis. They reduced their holdings in the iPhone maker by about 153 million shares in the first three months of the year, an analysis of 13F filings showed. That’s the biggest decrease since at least the first quarter of 2008 when Bloomberg started tracking the data. It’s also the most among any S&P 500 stock in the first quarter. —  Elena Popina, Bloomberg, May 15, 2018

“Reading through the article would give you a very bearish view of Apple,” Bill Maurer writes for Seeking Alpha. “Now I found it interesting that the article did not contain one of two key words: Buyback or repurchase.”

“Why do I say that? Well, Apple management repurchased a massive amount of shares during the quarter, reducing the outstanding count by nearly 140 million in the period. When a company reduces its outstanding share number by that much in a single quarter, it’s a significant number of shares less for investors to own,” Maurer writes. “In fact, Bloomberg shows how institutional investors have been selling Apple shares quite a bit in the past four calendar quarters. Well, the company has been buying back shares for years now, reducing the outstanding count from over 6.5 billion to under 5 billion. It’s simple math that tells us that there just aren’t as many shares available to own.”

“The Bloomberg article talking about massive institutional selling in Apple is misleading at best,” Maurer writes. “While it may be true that the most shares in a quarter were sold since 2008, it doesn’t necessarily mean the street is the most bearish about the name since the financial crisis. Overall, Apple is reducing its share count significantly, which likely has a natural selling impact on institutional holdings.”

Read more in the full article here.

MacDailyNews Take:

Facts are stubborn things, but statistics are pliable. ― Mark Twain

Apple bought back a record $23.5 billion shares on the cheap in Q1 as Wall Street naybobs nattered negativity – May 3, 2018


    1. Journalism should be that! But its not .
      It is nothing more than sham and shenanigans and a meduim for driving agendas and manipulation .

      Its one of the most corrupt institutions in US.. if not the whole world.

  1. I fail to see the logic of the article.

    Apple buying shares should encourage buyers to buy not discourage them. ..( less shares.. higher eps … higher share price for a given pe and earnings. )

    2nd- There may be less shares available to buy… but where is the correlation between that and selling shares.
    Apple is not forcing anyone to sell … less shares in the market does not equal to people selling shares.

    Intitutions may end up with less than they want since there are less shares……… but to sell them ? ?

    Or im missing someting.

  2. Those big funds are dumping Apple to buy Amazon, Facebook and Microsoft. Those stocks are practically being guaranteed to outperform Apple by a huge margin. Big investors are just piling into Facebook even after the data-breach scandal and Facebook easily recovered all of its losses. So much for concerns over consumer privacy.

    Take Microsoft with WS’s claims of reaching a $1T market cap within a year’s time. That’s absolutely incredible when based on a direct comparison with Apple’s fundamentals. Microsoft is valued far higher than Apple and I’m not sure why. A trailing P/E of 78 is crushing compared to Apple’s 18. Microsoft’s institutional holdings percentage is at 75% (thanks to Microsoft’s share count of around 7.6B). It’s just astounding how Microsoft’s future became brighter than Apple’s even after the Nokia debacle and Windows OS fall from grace. It seems a stretch even Apple will reach $1T by the end of this year unless Apple pulls something special out of the pipeline. Apple’s relatively low value always leaves me puzzled.

    It just makes sense for investors to go with the stocks Wall Street favors the most because those are likely going to perform best, at least over the short term.

  3. “Those big funds are dumping Apple to buy Amazon, Facebook and Microsoft.”

    No, they aren’t.

    Your ignorance of how Apple’s buyback works is showing.

    Apple contracts with individual institutions to buy X number of shares at Y price/share. That price includes a premium to the market, in order to avoid violation of SEC buyback rules.

    Then Apple pays for those shares UP FRONT, providing the contracted seller the means to acquire the shares on the open market (if they need to).

    With AAPL declining as it did during the quarter, the contracted institutions sold AAPL from their inventory at much higher prices than the shares were worth on the open market.

    Apple has been doing this since day one of the buyback program. Because AAPL shares have risen so much since the inauguration of the buyback program, Apple’s blended cost per share is quite a bit LOWER than what AAPL is selling for on the open market today.

  4. In keeping with the recent habit of Bloomberg hiring kids (relatively speaking) to do their reporting, what they’ve published is incomplete and lacks insight. Those of us who watched AAPL the day of Apple’s recent quarterly report and thereafter can only laugh at the evident blinders worn by the author.

    IOW: Dig deeper kids! There’s quite a lot more going on than you evidently know or understand. Research until you have too much information, then write.

    1. Of course, they are not expected to do deep research for an article that’s good only for a day; They are paid to attract readers. Even Samuel Clemens, one of the more amusing purveyors of “fake news,” worked on the principle of ephemeral stories.

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