Despite the weakness in Apple’s (NASDAQ:AAPL) iPhone sales in China, there are still funds buying Apple stock.
Almost a year ago, I wrote about fund managers still buying Nvidia (NASDAQ:NVDA) stock despite being up 25% on its Q1 2024 results. Its shares have more than doubled over the past 52 weeks.
Can Apple do the same?
I’m not sure that is in the cards, but there is evidence that its share price is undervalued at the moment, prompting fund managers to buy AAPL stock, which is down more than 1% year-to-date.
Evercore ISI analyst Amit Daryanani believes Apple is a Buy. The analyst rates it Outperform with a $220 target price, 20% higher than where it’s currently trading.
“Investors should not underestimate the ability of the iPhone to continue to deliver growth over the next five years,” Barron’s reported the analyst’s comments from a May 9 note to clients.
Here are three fund managers who feel the same.
Norges Bank
Norges Bank is Norway’s central bank, fulfilling a role similar to that of the U.S. Federal Reserve. However, it is different because it also manages the country’s Government Pension Fund Global on behalf of Norway’s Ministry of Finance. The fund’s current market value is 17.71 trillion Swedish kroner ($1.63 trillion).
WhaleWisdom.com data suggests that the fund made a new position in the fourth quarter of 2023, adding 176.1 million shares of Apple stock valued at $33.91 billion as of Dec. 31, 2023.
However, that isn’t entirely accurate.
Looking back on the central bank’s 13F-HR forms, it has owned Apple for years. At the end of 2022, it owned 167.37 million shares. Then, for the next few quarters, its 13F-HR forms were confidential to meet disclosure requirements under Norwegian law.
As discussed above, the latest 13F showed that it held 176.1 million shares of Apple stock, so I’m going to assume that it added approximately 8.73 million Apple shares in 2023, a 5.2% increase from 2022.
While Norges Bank isn’t one of Apple’s top owners, it is one of the 10 largest, in ninth position as of Dec. 31. Apple is the fund’s second-largest holding behind Microsoft (NASDAQ:MSFT), whose shares were valued at $35.92 billion at the end of 2023.
Cerity Partners
One of the investment firms to add the most Apple shares in the final quarter of 2023 was a much smaller asset manager. Cerity Partners initiated a new position of 9.43 million shares of Apple, accounting for 3.59% of its $30.44 billion in assets listed on its 13F.
Like Norges Bank, Apple is the asset manager’s second-largest holding, behind only the Vanguard S&P 500 ETF (NYSEARCA:VOO). With a 4.01% weighting and a market value of $1.22 billion, Apple’s valuation at the end of December was about $108 million higher than its Apple shareholdings valuation.
In the case of Cerity, the position is new because it converted debt securities valued at approximately $702 million at the end of Q3 2023 in the fourth quarter of 2023.
The New York City hedge fund and financial advisor has 16,424 clients and nearly $65 billion in assets under management.
Interestingly, at the end of 2022, it held 4.82 million shares of Apple stock, so clearly, Cerity’s opinion of Apple stock has gotten even stronger over the past 16 months.
SpiderRock Advisors
SpiderRock Advisors is the smallest of three investment managers with a Q4 2023 13F of $4.02 billion and assets under management of $4.85 billion from 335 clients. Based in Chicago, Apple is its largest holding, accounting for 13.52% of its $4 billion in 13F assets.
After reviewing the nuances of the Cerity Partners example from above, I checked SpiderRock’s 13Fs to confirm that it is a new position.
At the end of Q3 2024, it held put options for 629,900 shares. It did not own any Apple shares outright. At the end of Q4 2023, it had 3.13 million shares and put options for another 652,600 shares, an increase of 22,700 from the previous quarter.
However, it’s not an entirely new position in that it’s never held an interest in Apple stock. At the end of Q4 2022, it had call options for 600 shares and put options for 453,900. A year before that, it held put options for 127,800 shares as of Dec. 31, 2021.
The above situation illustrates why it’s essential to look at the actual 13Fs and not just data from third-party providers such as WhaleWisdom.com. WhaleWisdom.com is an excellent resource, but if you don’t subscribe to its paid service, you’ll not get the full picture.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
