Apple Inc (AAPL) 'Significantly Underweight' Among Top 100 Holders of Stock
Apple Inc stock has significantly declined in the portfolios of major tech investors compared to stocks of companies like Microsoft and HP in an analysis from Morgan Stanley. According to the report, analysts believe the low portfolio allocation will benefit Apple Inc as it prepares to release new products soon including the iPhone 6 and long-rumoured i-Watch.
Morgan Stanley said institutional investors will be more likely to allocate more Apple stock in their portfolios as the new product launch date nears. This will give the stock more room for growth in terms of share price.
Analysts said the top 100 holders of Apple stock are "significantly underweight" compared to other tech stocks that have an overweight bias. Morgan Stanley believes this will provide more room for an upside in share price.
By the end of the first quarter, major investors allocated 2 per cent of their portfolios for Apple Inc. The figure is 2.2 per cent lower in the fourth quarter of 2013 and the low end of the usual range of 1.6 to 4.5 per cent.
According to reports, Apple is the only tech company with a large market cap with an institutional ownership of below the S&P 500's 3.2 per cent.
On May 23, Apple shares gained 0.5 per cent at $610.35. Apple stock climbed 38 per cent in the last 12 months. The company has beaten Wall Street expectations due to strong iPhone and tablet sales.
Many analysts predict that Apple stock will continue to increase after the company will announce its new products. The WWDC event on June 2 is expected to be the iPhone 6 release date. Bill Miller, the asset managing firm Legg Mason Capital former chairman and current CIO of LLM, said, he remains "bullish" on the market and stands by his earlier statement. He said those who are bearish on Apple stock hate the market because it will not go down while the bullish ones hate it for not going up. He believes Apple is an "interesting stock" and recommends now is the good time to buy as the stock trades around $600.