Seeking Alpha

Look for institutional buying in Apple - UBS

  • UBS upgrades Apple (AAPL) to Buy from Neutral, bumps target to $650 from $540
  • "While Apple's stock has improved, institutional ownership has not recovered. It peaked at about 73% in April 2012 and has fallen to under 64%. Our sense speaking with investors is that many are now equal or underweight Apple relative to their benchmark, which could result in new money supporting the stock. Apple fits the value description and with potential double-digit EPS growth in F14 could show up again as a growth story."
  • "We think one or more of the following could boost the stock in the next year: i) the gross margin should be flat to up with iPad margins stabilizing and warranty accruals less of an incremental; ii) the imminent support of China Mobile (CHL) along with NTT DoCoMo (DCM) could aid the seasonally weak summer quarters; iii) the hire of Angela Ahrendts may provide an inspirational face to the company; and iv) new products should begin to renew faith in innovation, including wearables and iBeacon."
  • AAPL +1.1% premarket to $557.26
Comments (17)
  • I would add the following: Valuation - with major averages having almost twice the PE of Apple's cash adjusted PE, it is still cheap compared to almost all stocks, and very cheap compared to other solid companies. Guidance - the guidance for this qtr looks too low to me. A recent WSJ article indicates the 5S has sold much better than analysts realized. The mini R was offered weeks sooner than thought possible and supply has been pretty strong. Digitimes said upstream orders indicated Apple made 4MM mini Rs in November alone. That is much higher than thought, leading me to think Apple might sell more than 30MM iPads this qtr. Finally and anecdotally, I have been in the Apple store buying new stuff several times in the last month and every time I have been there the Mac tables have been swamped! I am trying to buy one for my son for Christmas, and I kept running into problems with the sale prices at third parties (running out, unavailable, price no longer valid--over the weekend). I expect them to raise guidance in the next few weeks. GLTA.
    3 Dec 2013, 06:59 AM Reply Like
  • Ok I am new here but how slow are these institutions in recognizing the potential of a company. Isn't the worth of the institutional investor that they know more than the verge investor.. And hence would be jumping all over the AAPL stock if not at 400 then 450, then at consolidation phase between 515-525? Are they not a little late to the party?


    Even I as a novice from Toronto (our mayor does crack and has 50%+ approval rating) can see it is a BUY now. Big deal UBS.
    3 Dec 2013, 07:49 AM Reply Like
  • You've gotta understand that these analysts/firms are not there to help the retail innestor. They are and will always be late in their sells/ buys recommendation.
    3 Dec 2013, 08:14 AM Reply Like
  • an234,


    "Even I as a novice from Toronto (our mayor does crack and has 50%+ approval rating) can see it is a BUY now. Big deal UBS."


    Thank you for the laugh this morning! Don't worry, if you lived in D.C. you would have re-elected a mayor caught on camera smoking crack with hookers!
    3 Dec 2013, 09:43 AM Reply Like
  • an234, heh, funny stuff- no need to worry, the "tutes" loaded big around 4-450. now they begin to make it public and manifest a rising tide, not rocket science. many small-medium buys when its down big, then periods of frenzy buying (520-550 move) to push it up with small buying support (yesterday) to keep profits safe and steady.


    sharks and minnows, just ride the waves- this wave should last well thru 2014 since CHL finally involved and excuse of "new products" likely a reality by summer 2014
    3 Dec 2013, 07:58 AM Reply Like
  • "Are they not a little late to the party?"


    This pretty much describes analyst SP targets, IMHO. And a lot of times, institutional investing. Follow the herd, even if it means buying high and selling low.
    3 Dec 2013, 07:59 AM Reply Like
  • Walked into an Apple store yesterday and bought two iPad Retina minis with no waiting. They seemed to have plenty of stock.


    Analysts are just guessing. And anyway, the value of an investment is over time - not next week. The dumping of Apple never made much sense - huge cash flow, loyal customer base, massive cash position, solid dividend. Has anybody noticed how Apple's retail presence is being copied by Microsoft, Intel and now even WIRED?
    3 Dec 2013, 08:05 AM Reply Like
  • Just read that CM is taking preorders on IPhones. CM done deal?
    3 Dec 2013, 08:09 AM Reply Like
  • " Just read that CM is taking preorders on IPhones. CM done deal? "




    *edit* Never mind, found it...!


    Google is your friend!
    3 Dec 2013, 08:12 AM Reply Like
    3 Dec 2013, 08:14 AM Reply Like
  • Apparently ordering on that website has now been put on hold.
    3 Dec 2013, 08:49 AM Reply Like
  • The original ad was pulled, maybe somebody jumped the gun?
    3 Dec 2013, 08:56 AM Reply Like
  • But is this enough now to say a CM deal is for sure? I bought more share today.
    3 Dec 2013, 09:00 AM Reply Like
  • someone woke up the UBS analyst after the share price blew through his previous "target".
    3 Dec 2013, 08:34 AM Reply Like
  • Analyst are here to make you buy when they are going to sell o make you buy when they are going to sell. NEVER EVER follow these people. They are crooks.
    3 Dec 2013, 08:41 AM Reply Like
  • Like someone else mentioned, institutions bought at the bottom. They will hold for years and ride the ups and downs. Who is buying now are hedgies looking for eoy booms. Retail will be last in as usual.
    3 Dec 2013, 08:41 AM Reply Like
  • It was a done deal the moment Apple announced that the 5C and 5S had TD-LTE compatibility.
    3 Dec 2013, 10:35 AM Reply Like
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