For the second year in a row, Apple has landed the top spot on a rather unlikely list: Bernstein’s top short ideas. For a stock that’s typically a Wall Street favorite, this is particularly interesting. This year Tesla Motors was tied for second place with International Business Machines and FitBit.
Apple short disappoints 2014 short-sellers
Bernstein analyst Toni Sacconaghi, Jr. and his team published their updated list of Tech Short Ideas today, which includes the results from the most recent survey on short ideas. They compared last year’s list with this year’s list and found that last year, Apple was mention as a favorite tech short.
They report that the top names from last year’s survey generated “significant alpha” over the one-, three-, six-, and 12-month time periods. The top seven names on last year’s list saw 80% or more hit rates. In addition to Apple, Intel, IBM, and GoPro were at the top of the list.
Among the top 14 names from last year’s short list ideas, 3D Systems and GoPro were the top two decliners after 12 months, with the former falling 74% and the latter losing 66%. Apple, FireEye and Accenture were the only three stocks on the list that outperformed the S&P 500 last year. Apple gained 12%, while FireEye gained 15% and Accenture gained 25%.
Apple joined by Tesla
Bernstein’s 2015 survey included a total of 315 short ideas. Apple was named nine times, while IBM, Tesla, and FitBit were named seven times each. Tesla supplier MobileEye was named six times. Twitter, Blackberry, Qualcomm, and LinkedIn were further down the list, earnings four mentions apiece.
The Bernstein team found some interesting trends as hedge funds and long-only investors had quite a different set of short ideas. Only four of the top 11 names on their list (MobileEye, IBM, FitBit and Arista Networks) were among the top mentions by hedge funds and long-only funds.
The analysts also report that the names on this year’s list which had the largest increase in short mentions include Tesla and FitBit. Even though Apple is still the top-mentioned short position, it was among the stocks with the biggest decline in mentions in the short survey. Other companies which had the biggest declines were GoPro, IBM (which also still remained among the top mentions this year), and Intel.
Apple short bet growing stronger
The Bernstein team also found that Wall Street appears to be turning more bearish on Apple as it looks like there’s “a strong emerging bet” on both the company itself and the smartphone supply chain in general.