Apple’s weighting in the S&P 500 is growing even faster, says analyst Katy Huberty.
From a note to clients that landed on my desktop Tuesday:
Apple institutional ownership increased 52bps Q/Q to 3.5% exiting the December 2019 quarter, while Apple’s weighting in the S&P 500 grew by 73bps to 4.6%, implying the spread between Apple’s S&P 500 weighting and institutional ownership levels expanded to over 100bps vs. 82bps at the end of the September quarter.
At 3.5%, Apple’s institutional ownership at year end was at its highest level since 3Q12, while at 4.6% Apple’s year-end weighting in the S&P was the second highest on record in the last 11 years (3Q12 S&P weighting was 4.9%). And over the 2 quarters ending December 31st, 2019, Apple’s institutional ownership increased by 83bps, the strongest institutional accumulation of Apple shares over a 180-day period since 2012, which we believe reflects investors’ increasingly positive outlook…
In recent days, Apple stock has pulled back 7% due to the COVID-19 outbreak limiting the pace of iPhone production; however, we’re buyers on weakness as we view the near-term impact as more of a timing issue rather than outright supply/demand destruction, and see strong Services/Wearables growth and the upcoming 5G iPhone launch as catalysts to re-rate shares towards our $368 price target.
Maintains Overweight rating and $368 target.
Click to enlarge.
My question: Yahoo Finance shows 62.7% of Apple shares held by institutions, yet Huberty has “institutional ownership” at 3.5%. What am I missing? I’ve asked the analyst.
Answer (from friends of the blog): 3.5% represents the share of all institutional holdings that are AAPL.