Bloomberg News

Apple Loses Favor With Hedge Funds SAC Capital, Viking

May 17, 2012

Two Apple Inc. MacBook Pro laptop computers, seen on Jan. 25, 2010. The new Apple laptops to be unveiled at Apple's annual developers conference starting June 11, 2012, will run on Intel’s new processors, code-named Ivy Bridge, and will have a slimmed-down body design from the current 0.95-inch thickness, said people with knowledge of the plans. Photographer: Daniel Acker/Bloomberg

Two Apple Inc. MacBook Pro laptop computers, seen on Jan. 25, 2010. The new Apple laptops to be unveiled at Apple's annual developers conference starting June 11, 2012, will run on Intel’s new processors, code-named Ivy Bridge, and will have a slimmed-down body design from the current 0.95-inch thickness, said people with knowledge of the plans. Photographer: Daniel Acker/Bloomberg

SAC Capital Advisors LP and Viking Global Investors LP were among hedge funds that sold a net 6.1 million shares of Apple Inc. (AAPL:US) last quarter, taking advantage of the 48 percent jump in the iPhone maker’s stock.

Hedge funds accounted for more than a third of the 15.2 million net Apple shares (AAPL:US) that were sold by endowments, banks, insurance companies and other investors during the first quarter, according to data (AAPL:US) compiled by Bloomberg, which was aggregated from regulatory filings. Even so, Apple remains hedge funds’ most valuable holding. As a group they controlled 37.8 million shares as of March 31.

“Apple has always been a hedge-fund favorite,” said Michael Binger, a senior portfolio manager at Gradient Investments LLC in Shoreview, Minnesota, which oversees about $225 million, including Apple shares. “You’re seeing some locking in of profits.”

Hedge-fund trades are closely followed by investors looking for clues on where the market is headed. Based on Apple’s price of $599.55 on March 30, the last business day of the quarter, sales by hedge funds had a market value of $3.66 billion. The last time hedge funds were net sellers of Apple shares was in the first quarter of 2011, when they dumped 7.25 million shares.

Meanwhile, hedge funds boosted their holdings in two of Apple’s rivals, buying a net 9.25 million shares of Microsoft (MSFT:US) Corp. and a net 3.39 million shares of Google Inc. in the first quarter, according to the data.

Cupertino, California-based Apple surged in the first three months of the year after one of the best quarterly reports in corporate history, as holiday shoppers bought record numbers of iPhones and iPads.

Second-Quarter Drop

Before today, the shares had tumbled 8.9 percent since April 1 amid concern that iPad demand will slow and iPhone sales may slump before the release of a new model later this year, said Shaw Wu, an analyst with Sterne Agee & Leach Inc. in Woodland Hills, California.

Apple fell 2.9 percent to $530.12 at the close in New York.

Not all hedge funds were net sellers. David Einhorn, co- founder of Greenlight Capital Inc., said Apple shares deserve to be higher.

“Apple is the most misunderstood company in the market,” Einhorn said yesterday at the Sohn Investment Conference in New York. “Apple is still penetrating the market and gaining share.”

Greenlight held on to its 1.46 million shares last quarter, according to Bloomberg data.

Steve Cohen’s SAC Capital and Andreas Halvorsen’s Viking Global each sold more than 1 million shares of Apple in the first quarter, representing almost their entire stakes.

Windows 8, Xbox

Viking Global bought a net 1.05 million shares of Mountain View, California-based Google during the quarter, data show. The company’s Android operating system powers smartphones made by Samsung Electronics Co. and HTC Corp. that compete against the iPhone, the source of more than half of Apple’s revenue (AAPL:US). Google (GOOG:US), the largest Web-search provider, lost 0.7 percent last quarter.

Microsoft, the world’s biggest software maker, jumped 24 percent last quarter, its best return since the three months to June 30, 2009. Investors are betting that the Redmond, Washington-based company will get a sales boost from the Windows 8 operating system, to be released later this year, that’s designed to work seamlessly between personal computers and mobile devices.

The company’s Xbox, the world’s top-selling video-game console, has also become a hub for new media products it’s introducing.

Jonathan Gasthalter, a spokesman for SAC, and Eric Komitee, Viking Global’s spokesman, both declined to comment on the filing.

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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Companies Mentioned

  • AAPL
    (Apple Inc)
    • $524.94 USD
    • 5.93
    • 1.13%
  • MSFT
    (Microsoft Corp)
    • $39.21 USD
    • -0.15
    • -0.39%
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