Big Funds Buying Into (And Out Of) Apple

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 |  About: Apple Inc. (AAPL)
by: The Keating Letter

In light of Steve Jobs' announcement that he would permanently step down as Apple’s (NASDAQ:AAPL) CEO and continue as chairman, I thought it would be worthwhile to look at what some large hedge fund and mutual fund managers have been doing with Apple’s stock.

Jobs has been on medical leave since January, and hasn’t been publicly involved in the day-to-day operations of the company. However, if you’ve followed his career, you would guess that he was still privately very involved, despite his health issues. Apple shares have risen more than 13% since the start of the year, outperforming the overall markets. The information below is from Q2 2011 filings:

David Einhorn has been an Apple bull for about a year. In the second quarter he increased his holdings by 240,000 shares and now owns just under 1.1 million shares. Apple makes up about 7.7% of Einhorn’s portfolio. I consider Einhorn one of the best investors to watch. His hedge fund, Greenlight Capital, has had tremendous returns since its founding in 1996. Einhorn is a value-oriented investor. While he doesn’t hold very many stocks forever, he isn’t a frenetic trader either. Apple is his third-largest holding, behind Pfizer (NYSE:PFE) and Microsoft (NASDAQ:MSFT).

Two other well-known investors are on the other side of the trade. Daniel Loeb is a hedge fund manager for Third Point and runs approximately $7.9 billion. He completely sold out of his Apple position last quarter by selling 200,000 shares. Loeb’s quarterly investor letters are always entertaining and insightful, and I highly recommend reading them.

Ken Heebner also completely sold out of his Apple stake in Q2. Heebner has traded in and out of the position for years, even previously selling his entire stake in 2008. Most recently he unloaded 318,500 shares. He has an eclectic portfolio with top holdings including Ford (NYSE:F) and Citigroup (NYSE:C).

While those two smart investors sold out of their holdings, another one initiated a position. Larry Robbins runs Glenview Capital, a $7.5 billion hedge fund. He opened a position in Apple in the second quarter by buying just under 500,000 shares. Apple now makes up more than 2% of his portfolio. His largest holding is Life Technologies (NASDAQ:LIFE), which makes up almost 9% of his portfolio.

Julian Robertson of Tiger Management, and some of the so-called Tiger Cubs, also own large stakes in Apple. For Robertson, Apple makes up 9.5% of his portfolio and is his largest holding. As you can imagine, he runs a focused portfolio and owns less than 30 stocks. Robertson added to his stake last quarter by about 30%.

Other Tiger Management alums - Steve Mandel, Chase Coleman, John Griffin, and Lee Ainslie - own significant positions in Apple as well. These investors and other “Tiger Cubs” learned the trade under Robertson and often have overlapping holdings. Chase Coleman has more than an 8% stock position in Apple and another 3.5% position with call options. Steve Mandel has a 5% position, which he increased last quarter. Apple makes up about 6% of John Griffin’s portfolio and about 4% of Lee Ainslie’s portfolio. All of these portfolio managers increased their stake in Apple last quarter.

Disclosure: I am long F, MSFT, PFE.