Apple stock’s bearish data is actually positive

Last week, news broke via SEC filings that large investors like Warren Buffett had sold tens of millions of shares of technology giant Apple during the latest quarter. Berkshire Hathaway’s sale led an overall decline in the amount of Apple stock held by major firms in the final calendar period of 2020.

Image: Apple logoBill Maurer for Seeking Alpha:

However, the data provided doesn’t tell the whole story, and it actually represents a positive for the stock. When combined with the recent pullback in shares, I believe Apple presents a buying opportunity currently.

On the face of it, this Apple data might look quite bearish. A net sale of more than 100 million shares might indicate to some that major investors are losing faith in this name. However, we have to dig into the company’s 10-Q filing for a key point that makes the data look quite different. It has to do with Apple’s major share repurchase program:

During the three months ended December 26, 2020, the Company repurchased 200 million shares of its common stock for $24.0 billion.

So when you think of Apple holders selling 109 million shares, keep in mind that the company’s outstanding share count came down by over 150 million shares in the fiscal period. This isn’t the first time we’ve seen bearish institutional data presented that looks much different thanks to the buyback, and I’m sure it won’t be the last time either. Apple has taken down the outstanding share count by more than 715 million shares in the past year, so that’s a good chunk of supply removed from the market. It’s natural to think that institutions will have to sell more over time as management further buys back stock.

MacDailyNews Take: Apple stock buying opportunities are buying opportunities for both investors and Apple’s capital expenditure program which gives the company more buybacks for their buck. As the Mother of All iPhone Super Cycles, a multi-year affair, has just begun, as have COVID-19 vaccine distribution and the economy reopens, Apple is well-positioned, especially with a weaker dollar.

12 Comments

  1. New President
    Huge Apple earnings
    Tim Cook transforms Apple into huge BIG TECH CENSOR, like Twitter.

    Result – Apple stock drops like a rock. Every day. No end in sight. Maybe investors don’t like communism. Lose $100 billion in market cap every day and eventually your talking serious money. Well, “you have to break some eggs to make an omelette.” Vladimir Lenin. Well, Apple investors are OK with seeing their fortunes lost, if it means the planet is saved and people are not allowed to say things that make us uncomfortable. Easy come, easy go.

        1. How long have you followed the stock market? Billions can be lost off a company’ market cap for no rationale reason. Apple will be fine if investors hold out for longer term. If in it for the short term, money should have been placed in a GIC or savings account instead

          1. I have owned Apple for 20 years. Apple would be fine if Tim Cook had not turned it into a Big Brother Censorship Machine that attacks anyone who dare say anything not approved by Al Gore and Tim. That means anyone who says anything sane and good about America. Apple is now dead money with this new mission and with the new Biden State Run Economy, total regulation of the economy by Marxists and total taxation.

            1. Then for the sake of your own sanity, sell your shares, take your profit, and go. Leave the “dead money” stock for the rest of us long-term suckers. We’ll do just fine.

  2. sometimes, the most simple and silly things can pierce the veil of inauthenticity with which ridiculous people try to cover the nation. one of these is season 19 episode 5 southpark, this should be required viewing for all the faculty of harvard and yale, berkley and stanford, brown and princeton, dartmouth and columbia, etc., etc. at the end of the episode, a figure of great consequence is executed so that the nation can remain under the veil.

  3. I’m not concerned about Apple not recovering its loss of value. I feel certain Apple will recover its losses and likely end up with a share price of around $170 by the end of the year. I’ll be satisfied as long as Apple keeps boosting its dividend each year which will provide me with a comfortable living income every year. I believe Apple will continue to sell plenty of iPhones, computers, wearables and Services. Any new venture Apple succeeds at will be an added bonus.

    As long as Apple continues to make plenty of revenue and profits I have nothing to worry about and Apple will likely perform better than most tech stocks this year. I’m not in agreement with everything Apple does, but I have done very well by owning Apple and I’ll just have to depend on them to make the right choices in the future. They’ve done better making money for me than I could ever do for myself. All I have to do is buy and hold Apple which I have been doing for sixteen years. That’s very easy for me to do.

  4. MS48,

    I agree again. I also agree with Kent, also, though. Why alienate a large chunk of your loyal customers by carrying the SJW torch? Why not just stay “neutral” and concentrate on technology and what Apple used to do best.

    1. When I was young, nobody would have dreamed of asking why a person, company, or country might choose justice over injustice. It seemed so obvious that we even had a statue in New York Harbor “carrying the SJW torch” to stave off the darkness of social injustice. We all learned in church or synagogue, and even in school, that those who stay neutral about justice have chosen not to support it. The Divine Comedy devotes an entire canto to those whose choice to stay neutral in the struggle between good and evil means that not even Hell will take them in. Our parents taught us how engineers, technologists, and public servants who ignored the moral implications of their work had engineered the terribly efficient Final Solution. When Gordon Gecko insisted that “Greed is Good,” everyone knew that he was one of the Bad Guys.

      From the time two guys named Steve were building computers in a garage, Apple has had an explicit set of social principles. Those are conspicuously posted on their website and in all their corporate literature. Neither Steve ever gave a moment’s thought to whether those principles might “alienate” those who were not also committed to social justice. Those who cannot understand that should perhaps take some steps to restore their moral compass.

  5. Typical of your disingenuity that borders on deception. No one said anything about choosing injustice and it’s a false premise to assert that denying SJW thinking has anything necessarily to do with injustice.

    To act like you don’t know in what context social justice is being used is putting forth a false narrative.

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