Ray Dalio (Trades, Portfolio)'s Bridgewater Associates disclosed an equity portfolio valued at some $10.53 billion at the end of the fourth quarter of 2016 and a top 10 concentration of 83.2%.
In this article, we will look into the eighth top holding held at the end of the fourth quarter: Apple Inc. (AAPL, Financial).
The fund held 416,500 shares, up by 20% on the quarter. The stake's value amounts to $48.2 million and 0.46% of its 13F portfolio. In that period, the stock gained 3.24%, and on a year-to-date basis, the stock returns 21.3%, which is extremely appealing.
Apple has benefited from users who switch from Android, and the business model makes repeat iPhone sales through time and new models. This is what I call a long-term customer relationship. Moreover, with the introduction of other business lines such as Apple TV or Apple Watch, the company can retain clients a long time and achieve an excellent growth in the last couple of years. Furthermore, Apple CarPlay and Apple Pay should help to switch costs and prevent a user from leaving the platform.
The price shows an interesting upward trend in the last five years. A long position of $10,000 made five years ago would have gained an annual return of 11% per year to $16,851.
Several analysts have reiterated bullish ratings on Apple, including Goldman Sachs and BlueFin Research, which have reaffirmed "Positive" ratings. The analysts at Royal Bank of Canada are more bullish on Apple as they raised their price target to $155 per share from $140 per share. RBC's upgrade comes just days after the analysts at Citigroup raised their price target to $160 per share from $140 per share.
Hedge fund's positions
The largest shareholder is Warren Buffett’s Berkshire Hathaway (BRK.A)(BRK.B) with 57.36 million shares, valued at $6.6 billion, held as of the end of fourth-quarter 2016. The guru has notoriously boosted the stake by 277% to reach 4.5% of its 13F portfolio.
At the end of that period, the second-largest shareholder was Ken Fisher (Trades, Portfolio)'s Fisher Asset Management with a large number of Apple's shares, its portfolio containing 11.49 million shares valued at about $1.3 billion, up by 2% in the trimester.
Final comment
Apple's ability to generate “repeated” purchases will be the key for future growth. Further, the other products discussed are current drivers for the client's loyalty.
Disclosure: Author holds no position in any stocks mentioned.
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