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08-20-2013, 11:49 PM #1
Apple Shares Dropped by Institutional Investors in 2Q 12013
Despite all the recent news and the pending release of the iPhone 5S and rumored iPhone 5C, institutional investors appeared to have lost some faith in Apple’s performance last quarter, as a new examination shows that their holdings in Apple dropped 4% over the period. The second quarter of this year marked the third quarterly drop in institutional ownership of Apple shares according to a recent report by MarketWatch. As of right now, it’s uncertain how solid of a trend last quarter’s 4% drop represents due to what appears to be a steady rebound in the company’s share price.
The Cupertino California company’s shares dropped 10.4% over the second quarter to bottom out at $396.50, one of the company’s lowest prices in years. Since then, shares have rebounded by 28% and currently sit above $500. AAPL saw a boost recently from the announcement by Carl Icahn that he was taking a roughly $1.5 billion stake in Apple, saying that the Cupertino California company was “extremely undervalued.” The new figures predate Icahn’s announcement, raising some questions as to the degree to which that institutional holdings trend is still applicable given the turnaround.
A number of investors have become very cautious on Apple in recent months, even given the company’s strong profitability. Competition from Google’s Android and other phone manufacturers could gradually marginalize Apple at the expense of those profits. Investors seem to be waiting for Apple to introduce a cheaper iPhone or to bring out new, innovative products to spark growth once again. With the rumors of a low-cost iPhone to debut in September, investors seem to be getting encouraged. Additionally, Apple announced earlier this year a dividend program, a move thought by some to be aimed at putting a bottom under AAPL, which at the time was losing value.
Despite all this, investors may hold off on repurchasing Apple stock until they see more of what the company has in store. In April, Apple’s largest active shareholder cut its stake by 10% while institutional investors grew their shares of Microsoft by 2.9% and Google by 1.7%.