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Fidelity Cuts More Apple Inc. (AAPL) Stake

By Mani
Updated on

Fidelity Contrafund Fund (MUTF:FCNTX) trimmed its holdings in the Cupertino, California-based company by another 9 percent.

Fidelity Cuts More Apple Inc. (AAPL) Stake

Of late, some of the large mutual funds have been dumping Apple Inc. (NASDAQ:AAPL) shares. The fifth largest U.S. mutual fund, American Funds The Growth Fund of America A (MUTF:AGTHX) earlier trimmed its stake in the iPhone maker during the first quarter.

Prominent hedge-fund managers such as Julian Robertson and David Tepper have also significantly cut their exposures to Apple Inc. (NASDAQ:AAPL) during the last quarter. The reduction in stake was revealed in their 13F filings with Securities Exchange Commission.

Boston-based Fidelity Contrafund Fund (MUTF:FCNTX), run by portfolio manager Will Danoff, owned 9.2 million shares of Apple Inc. (NASDAQ:AAPL) at the end of last month, down from 10.1 million shares at the end of March.

Apple Inc. (NASDAQ:AAPL)’s weighting in the contra fund dropped from 4.9 percent to 4.3 percent at the end of April. The contra fund held higher weighting in the iPhone maker at 7.3 percent at the end of 2012 and around 9 percent in the middle of last year.

Apple Stock Second Heaviest Weighting In Fidelity

Apple Inc. (NASDAQ:AAPL) stock held the second heaviest weighting in Fidelity Contrafund Fund (MUTF:FCNTX), behind  Google Inc (NASDAQ:GOOG)’s 5.7 percent.

Fidelity Contrafund Fund (MUTF:FCNTX) is the largest active shareholder in the iPhone maker. Only Vanguard’s passive fund Vanguard Group Index Fund holds more shares in the iPad maker.

Will Danoff in his recent commentary said investors continue to express concern about Apple Inc. (NASDAQ:AAPL)’s decreasing profit margins and increasing competition from device makers such as Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930).

The portfolio manager, who manages over $100 billion in Fidelity Contrafund Fund (MUTF:FCNTX), however said he still found the iPhone maker’s stock to be relatively cheap. He was enthused about Apple’s cash flow generation prowess as the iPhone maker was generating $1 billion of free cash flow per week.

Analysts Bearish On Apple’s Stock Performance:

However, of late quite a few analysts have been bearish on Apple Inc. (NASDAQ:AAPL)’s stock performance. For instance, Citi in its recent report predicted the iPhone maker’s share price would fall to $430 in the saturated market. The report cited International Telecommunications Union Data to highlight market saturation with nearly 96 percent of global population already being active mobile subscribers during 2013, limiting the growth potential for the iPhone maker.

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