Apple Inc. (NASDAQ:AAPL) has been on quite a run in the last three months, culminating with a big Q2 earnings beat. However, recent Securities and Exchange Commission filings show that a number of big funds were dumping shares of AAPL stock throughout Q2.
According to the newest round of 13F filings, a number of high-profile fund managers were selling Apple stock in Q2:
- Leon Cooperman’s Omega Advisors sold its entire $24 million position in AAPL stock.
- George Soros’ Soros Fund Management sold its entire $330,000 position in Apple stock.
- Jim Chanos’ Kynikos sold roughly 27% of his $5.9 million stake in AAPL stock.
- David Einhorn’s Greenlight Capital sold roughly 16% of its Apple stock, but it still holds a $741.2 million position.
Together, these four funds are some of the largest and most successful on Wall Street. AAPL investors never like to see traders selling shares. It’s particularly concerning when the sellers are Wall Street “whales” like the traders mentioned above.
Why Are Fund Managers Down on AAPL Stock?
First of all, it’s important to realize that, at least in the short-term, all of these big-name sellers got it wrong on Apple.
The latest 13F filings came out this week, but they are backdated to the fund holdings through the end of June. From March 31 to June 30, AAPL stock plummeted 12.7%. That’s the period when these funds were selling. Since June 30, which includes the Q2 earnings beat, AAPL stock is up 15.5%.
Still, what could these fund managers see in AAPL that’s scaring them so much?
Fund manager Carl Icahn was once one of Apple’s biggest cheerleaders, but he sold his entire stake in Q1. Icahn is worried about the Chinese government making AAPL’s life difficult. However, Icahn has also made some ominous predictions about the stock market as a whole.
In April, Icahn told CNBC that a “day of reckoning” is coming for U.S. stocks. Icahn subsequently disclosed that Icahn Enterprises LP (NASDAQ: IEP) had a net market short position of 149%.
George Soros shares Icahn’s fear of an imminent market collapse. In Q2, Soros doubled down on his bet against the S&P 500, buying put options on more than 1.9 million shares of the SPDR S&P 500 ETF Trust (NYSEARCA:SPY).
Back in January, Soros said that the current global economic environment, particularly in China, reminds him of the “crisis we had in 2008.”
It’s certainly troubling for any investors to read these kinds of comments. However, it might actually be reassuring to Apple shareholders that these fund managers aren’t necessarily singling out AAPL as a bearish bet. Instead, they might simply be reducing their overall exposure to U.S. markets by selling the world’s most commonly owned stock.
Buffet Takes the Other Side on Apple Stock
Perhaps the most reassuring 13F filing this week for Apple shareholders was that of Berkshire Hathaway Inc. (NYSE:BRK.A, NYSE: BRK.B). While other big-name fund managers were selling AAPL stock in Q2, Warren Buffett’s firm upped its Apple stake by more than 55% in Q2. Incredibly, Berkshire now owns $1.65 billion of AAPL stock.
Buffett’s involvement with AAPL stock in the last couple of quarters may be another indication of why other managers are throwing in the towel. Apple reported two consecutive quarters of declining iPhone sales this year for the first time ever.
AAPL is no longer the growth juggernaut that it once was. However, with a dividend yield of 2% and a forward price-to-earnings ratio of only 12.7, AAPL stock has become a relatively low-risk value investment.
Buffett believes that patient investors will be rewarded on Apple in the long-term. Other fund managers may simply see potential for higher returns elsewhere and/or they might not have the patience that Buffett does.
As of this writing, Wayne Duggan did not hold a position in any of the aforementioned securities.