Past performance does not guarantee future result, but…
In a note to clients Monday, Stifel analyst Aaron Rakers took a deep dive into how the big boys—the top 100 institutional investors—have played Apple over the years.
Two charts caught my eye.
The first shows how much AAPL the top 100 are holding—or more precisely, what percentage of them are holding more AAPL in their portfolio than S&P 500.
Three things to note:
- Institutional holding among the top 100 is at its highest level since 2013
- The broader institutional market is lagging the top 100
- The vast majority of institutional investors are far from overweight. “We will be left to gauge,” writes Rakers, “the propensity of the 76% that are equal/underweight Apple to increase their exposure ahead of the iPhone 8 cycle.”
The other chart addresses the old question of whether buy-the-rumor-sell-the-news is smart play in the rumor-rich Apple market.
The answer, over the past five iPhone launches, has been yes. If you bought Apple six months before every one of those launches—say the end of April—you would have realized, on average, an 11.2% return compared with 4.1% if you bought six months post launch (March).
So what does that mean for investors anticipating the iPhone 8? Here’s Rakers’ take:
With expectations calling for significant enhancements to Apple’s 10th anniversary / iPhone 8, we believe ongoing leaks / speculation (positive thus far) will leave us to gauge whether this cycle will be similar to iPhone 6 cycle (e.g., shares +29% 6 months post launch) given the significant upgrade opportunity of Apple’s +700M iPhone installed base.
Reiterate Hold and $130 price target.