Written By Guest Author Insider Monkey. There are more
than 8,000 hedge funds in existence today, and of this group, we at Insider
Monkey track close to 600 of the best and brightest. The best picks of the best
hedge fund managers have market-beating potential (see how we returned 47.6% in one year), and within this group, there are many
ways to parse the data.
This week, we’ve
covered some important tech topics in particular, like why Warren Buffett probably won’t buy Twitter [TWTR] and the
peculiarities of Longbow Securities’ moves in NQ Mobile [NQ]. One subject that has been
flying under the radar, though, is Apple [AAPL] and the hedge funds that
surround it.
According to one Apple news site, the tech giant’s latest earnings release has been
met with mostly optimism on Wall Street, especially from JPMorgan’s Mark
Moskowitz. Moskowitz expects Apple’s current share price to hit $600 by
December of 2014, primarily based on strong iPhone sales, the iPad’s potential
in future quarters, and gross margins that are “good enough for long-term
investors.”
With that in mind,
we thought it’d be useful to run through the hedge
fund managers that
have stayed committed to Apple over the long run. Here are the four biggest
bulls that have held the stock for at least two years:
David Einhorn
David Einhorn first bought Apple in the second quarter of 2010 and
in the three years since, the manager of Greenlight Capital has upped his stake
by nearly eightfold. While Tim Cook and the rest of Apple’s leadership didn’t
adopt Einhorn’s iPref idea, his latest Q3 shareholder letter reveals he’ll likely remain bullish here
for the “longer-term.”
David Shaw
Another
billionaire, David E. Shaw, has held shares of Apple for the better part of the
last decade. The manager of D.E. Shaw & Co doubled his exposure to the
stock in the last round of 13F filings, and it actually represents the largest
long-only holding in his entire equity portfolio. Shaw and Einhorn have the two
largest Apple stakes of the funds we track, both of which represent nearly $1
billion in market value apiece.
Philippe Laffont
Philippe Laffont’s Coatue
Management, meanwhile, has been
a major Apple investor since the fourth quarter of 2004. Laffont founded his
tech-focused hedge fund in 1999 after working for the legendary Julian
Robertson, and Apple was his top stock pick for all of 2011 and most of 2012
before he slashed over half of his stake in the fourth quarter.
The fund manager
now owns over $600 million in Apple stock and has recouped all of the shares he
sold at the end of last year. While we don’t know exactly when Laffont cut his
stake in 2012, it’s evident that he avoided much of the swoon that plagued
investors who stuck with their gut, and actually bought back when shares were
cheaper.
Ken Fisher
Although he’s
technically not a hedge fund manager, Ken Fisher is a prominent investor worth tracking. Fisher Asset
Management oversees nearly $40 billion in equity investments alone, and while
it has been a long-term shareholder of Apple, the firm has only recently upped
its stake to significant levels. At the halfway point of 2012, Fisher held $50
million worth of Apple stock; today, that number is more than $600 million.
It’s no secret
that Fisher likes growth stocks that also trade at reasonable valuations, so we
can understand why he’s bullish here. Apple trades at a PEG ratio near 0.9, and
the sell-side still expects it to generate earnings growth of 15% a year over
the next half-decade. That forecast trumps peers like Google [GOOG] and
Microsoft [MSFT], and it’s cheaper than both.
Disclosure:
none