Apple defied its naysayers to rise 10.3% this week, including a 3.5% gain Thursday on positive news about its iPhone 7 sales. The benefit from the upturn will have widespread benefit for portfolio managers, as Apple (AAPL, Financial) was the most-purchased S&P 500 stock of all large funds in the U.S. in the second quarter.
Of approximately 4,500 firms managing more than $100 million, 1,177 bought or added to a position in Apple, according to GuruFocus data.
The tech company and iPhone maker fell to its second-lowest price-earnings ratio in three years during the quarter, bottoming at 10.04 in May. Its price-book ratio came down from its high over the past two years, peaking at 6.28 in February 2015, to levels more consistent with 2013, bottoming at 3.79 in second-quarter 2016.
Apple’s earnings per share also declined in the second quarter to their lowest in two years, reported at $1.42. Its cash store provided an attractive selling point. Cash and equivalents soared to a record $61.76 billion, from $34.70 billion a year prior.
Investor sentiment turned mixed during the second quarter as iPhone sales plunged 23% year over year, and the introduction of the new iPhone 7 in September loomed. At that time, some well-known investors sold their stakes, such as George Soros (Trades, Portfolio), John Burbank (Trades, Portfolio) and Leon Cooperman (Trades, Portfolio).
The market became more excited about the company this week after it said it had sold out of its iPhone 7 Plus model and the iPhone 7 in black, and would have no inventory to offer when it officially goes on sale in stores on Friday. Though Apple refuses to disclose its actual sales numbers, the stock rewarded investors who held onto it, jumping $115.57 per share Thursday, its highest price in nine months.
Some of the noted investors enjoying the payoff include Warren Buffett (Trades, Portfolio), who owns the most Apple of all tracked investors, with 15,227,702 shares, a full 0.28% of those outstanding. One of his comrades, Ted Weschler and Todd Combs, bought Apple in the first quarter and increased the position by 55.2% in the second, for an estimated gain of 16% so far. David Einhorn (Trades, Portfolio) has the greatest percentage of his assets dedicated to Apple at 12%. He reduced the stake, which he has held for five years, by 16.5% in the recent quarter.
The four other most sought after stocks of all the funds searched were: Microsoft (MSFT, Financial), AT&T (T, Financial), Wells Fargo (WFC, Financial) and Verizon (VZ, Financial).
Microsoft had 1,129 funds buy shares, AT&T had 1,020, Wells Fargo had 1,018 and Verizon had 993. Apple still stood out for attracting investor interest. Though the number of firms to buy it beat Microsoft by a small margin, the amount that they bought far exceeded the rival. Apple had a combined weighting of 2,346% in the funds, while Microsoft had a combined weighting of 1,778%, falling short of Apple by 24.2%.
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