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Friday screencast: Alpha Apple

Apple is the most popular stock amongst hedge funds.  Given its performance of late that is not particularly surprising.  Is this a sign that hedge funds have “run out of ideas”?  This argument rests on two points.  The first is that hedge funds are increasingly prone to herding and all that it implies.  The second is that Apple is an “obvious” stock pick and is unworthy of its popularity.  For any number of reasons it does seem that hedge funds are increasingly focused on a more limited subset of stocks.  The second argument is sketchier.  One could argue that a hedge fund that didn’t own Apple has in fact been missing out on an important opportunity.  When, and if, Apple turns it will have a big effect on the market and market psychology, but who is to say that time is imminent?  In today’s screencast we look at the role of Apple in the hedge fund universe.

Items mentioned in the above screencast:

Hedge funds have run out of good ideas.  (Fortune Finance)

Don’t forget that Apple (AAPL) underperformed for decades.  (Crossing Wall Street)

A valuation of Apple.  (Trefis)

Hedge fund herding.  (Abnormal Returns)

Apple as an outlier.  (Abnormal Returns)

Daily price chart of Apple (AAPL).  (Finviz)

Update:

Market Folly, “Does everyone clamoring about $AAPL being a hedge fund hotel realize they only own 4% of the equity capitalization?” (StockTwits)

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