Is Apple Over-Bought Or Under-Bought?

Posted: August 10, 2015 in AAPL, Apple, Apple TV, Business, Carl Icahn, Farros, iOS, Royal, Technology and Business

One of the raps on AAPL is that everyone and their mother owns it… as in, there’s no one left to buy it… and if that is the case, how does the stock go up?

One way to evaluate ownership is to see how much hedge funds own.  Presumably, these are the world’s smartest investors.  Definitely, a lot of money is consolidated into a relatively few hands and their purchases tend to move the stock price needle (so to speak).

From the latest data, hedge funds collectively own 5.8% of all publicly traded companies.

But, together, they only own about 2.9% of AAPL… 50% underweight the market.

That makes sense.  Money people rang the cash register after the terrific 2014 run.  After all, they don’t get bonuses unless they book profit.

But even that 2.9% figure is skewed.  Turns out a big chunk of hedge fund ownership is held by Carl Icahn… which means that net Icahn, most hedge funds own even less of Apple…

… which means there are definitely still impactful potential buyers for Apple on the sidelines.

And why would they buy?

Lots of good business reasons… but probably the biggest is the ole’ swinging pendulum… like a moth to a flame, they’re all looking how “cheap” AAPL is… how exciting the upcoming iPhone upgrade cycle will be… maybe the introduction of a real, live iOS TV (i.e., my daughter spending a lot of money on TV apps like she does on iPhone apps)… and they won’t be able to resist… they’ll start piling into AAPL… again.

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