)'s stock has gone from bad to worse this year, plunging 12%
already this afternoon to $453 a share, significantly off of its
52-week high of $705 reached in September. Only recently talk
abounded that Apple would hit $1,000 per share, and perhaps
achieve first company with a trillion-dollar market cap status.
Some GuruFocus Gurus escaped just in time, others lost, and still
others are greeting this as a temporary market dip before Apple
continues on to greatness.
According to Apple's Guru Trades page, 28 Gurus own Apple shares,
as of Sept. 30, 2012. Five Gurus increased their positions in the
company, 17 kept their positions unchanged or slightly adjusted
them, and 6 reduced their positions. Only three eliminated all
With 14.6% of his total assets invested in Apple,
of Tiger Global Management has the most riding on Apple's
performance. He is one of the lucky early investors, having begun
his stake in 2008 at under $100 a share on average. On average he
has earned a 125 percent gain.
Robertson continued to like Apple into 2012 and added more than
32,000 shares in the first half of the year. The position
consists of slightly more than 100,000 shares at third quarter's
Robertson commented on why he liked Apple in a
on Oct. 23, 2012, when the company's stock had been sliding for
about a month: "Apple is a magnificent company and a great value
at these levels, and it's rare that you get to have a great
company at a great value," he said. "Apple is now somewhere
around 14, 15 times next year's earnings. It's very reasonable
for the growth you can get," he added.
On the strength of groundbreaking technology from the mind of its
late, relentlessly creative CEO, Steve Jobs, Apple grew revenue
at the break-neck average annual rate of 48% over the past five
years. EBITDA simultaneously grew at 68.5%, free cash flow at
55.3% and book value at 52%.
The question for many now is whether that type of growth can
continue absent idea-generator Jobs, new products and with
intensifying competition from Research In Motion (
), Samsung (
), and others.
While the word "record" peppered Apple's first quarter results,
released Jan. 23, 2013, its revenue narrowly missed analysts'
estimate. Revenue was a record $54.5 billion, driven by increases
in iPhone, iPad, Mac, iPod sales, to record levels.
Another dim spot was its flat year-over-year earnings. Profit
inched up to $13.08 billion, or $13.81 a share, from $13.06
billion, or $13.97 the previous year.
Apple expected to report $52 billion in revenue and $11.75 in
EPS. Analysts were expecting $54.7 billion in revenue and $13.41
in EPS, according to the LA Times.
Another notable Apple investor, Greenlight Capital's
, did not see the results as problematic and still believes in
the underlying strength of the company. In
his fourth quarter letter
, he intimated:
"On the long side, Apple (
) shares fell from $667.10 to $532.17, giving back all its third
quarter gains and then some. We used the lower prices as an
opportunity to repurchase the shares we sold in the third
His made the buy decision despite Apple, along with Green
Mountain Coffee Roasters (
), contributing significantly to his fund's 4.9% loss in the
fourth quarter. The loss quelled his overall return for the year
As of the third quarter's end, Einhorn held 1,090,890 shares,
which carried a 48% gain on his average purchase price. He has
12% of his fund in Apple.
Finally, at least one Guru's fund has commented on their loss of
faith in the company's growth prospects. An analyst from Ron
Baron's Baron Funds wrote in their third quarter letter:
"Lastly, before the end of the quarter, we finally sold Apple,
), one of the Fund's most successful investments since inception.
This was a tough judgment call that has worked out well, at least
on a short-term basis. Our reasons included concerns about the
ultimate market cap the market would allow the company to
achieve, rising competition from Android devices, the release of
the iPhone 5 with a sub-par mapping application and concerns
about the ability of the company to hold together its management
team in the post-Steve Jobs era (a concern that was validated
when the company announced management changes)."
Notable managers that lost on Apple tended to buy in more recent
quarters. Appaloosa's David Tepper, who made Apple his largest
holding under the PowerShares QQQ Trust ETF (
), began buying in the first quarter of 2011. His average
purchase price of $448 for all his shares is at break-even
currently, up just 1%.
Daniel Loeb is sitting on 20% paper losses from his average
purchase price since opening a position in the first quarter of
2012 at $504 a share. He has entered an exited the stock at
profitable points in the past, however.
His reason for coming back to Apple appeared in his first quarter
"Following Apple's December quarter earnings, we re?established a
position in the stock at $445 per share, a level 10% up from the
pre?earnings price. While the market reacted positively to the
strong results, we believed it was still not discounting
adequately the strong likelihood that Apple would return capital
in 2012. The prospect of capital return stood to broaden the
investor base enabling the market capitalization to re?base
around an attractive dividend profile, particularly relative to
the Company's growth rate. Beyond the capital return catalyst, we
were focused on Apple's entry into the 4G device space in 2012,
led by the latest iPad and the pending iPhone 5," he wrote. (Read
Indeed, Apple initiated dividend payments in July 2012 and paid
its third of $2.65 a share on Jan. 2013.
Though Loeb has not yet reported his fourth quarter portfolio
moves, Apple fell out of his top-five positions in October. He
still maintains a position of unknown size as he lists the
company in his "top losers" column for the month.
Only one Guru presumably interpreted Apple slow-down as permanent
or too risky and exited completely in the third quarter, Ken
Fourth quarter portfolio updates will provide a clearer picture
of how Gurus feel about Apple going forward. A lack of new
in-the-wings product announcements increases the challenge for
investors to determine the sustainability of the company's
CEO Tim Cook piqued interest about what is to come but avoided
details in Apple's first quarter conference call.
""We're working on some incredible stuff," he said. "The pipeline
is chock full. I don't want to talk about a specific product, but
we feel great about what we've got in store."About GuruFocus:
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