This time of year is filing season for hedge funds and other institutional investors with over $100 million in assets under management. They must disclose certain portfolio positions on quarterly 13F filings with the SEC with 45 days of the end of the preceding calendar quarter.
The 13Fs due mid-February each year are particularly interesting, since they contain portfolio adjustments made in the final three months of the prior year. While these filings are anything but real time, they nonetheless provide some intriguing insights into what some very savvy folks are thinking.
For instance, Bridgewater Associates, the largest hedge fund in the world with $160 billion under management, added significantly to its position in Microsoft ($MSFT) while selling fully half of it’s 535,000-share stake in Apple ($AAPL). This is curious, since the former has been a ho-hum performer while the latter recently became the most valuable company in history. In fact, $AAPLis up 15% already year-to-date, while $MSFT is down nearly 6%. Ray Dalio, head of Bridgewater, clearly felt it was time to take some chips off the table. Interestingly, Dalio added to commodity plays in the quarter, particularly Brazilian energy fund Petrobas ($PBR), GoldCorp ($GC) and fertilizer company Potash ($POT).
Among Vetr.com users, Apple remains our most followed stock, watched by over 300 of our users. But especially after $AAPL’s run so far this year, 47 of the 69 active ratings we have on Apple are now bearish, versus only 22 bullish, and the 6-month target price is three points below the company’s $127 closing price today.
In other words, the most valuable company in the world is now an outright sell, at least in the aggregate opinion of our users.
Meanwhile, Microsoft is rated a buy on Vetr.com, with 20 of 24 active ratings on the stock bullish and only 4 bearish, although the $45.29 average price target for $MSFT is only a few points higher than the current quote. All told, Vetr.com users seem pretty supportive of Mr. Dalio’s decision to halve his $AAPL position and dramatically increase his fund’s exposure to $MSFT.
Hedge fund titans didn’t become that way buy buying high and selling low, so Bridgewater’s steps are not that hard to understand given the price performance in $AAPL over the past few years. As the old saying goes, no one ever went broke taking a profit. The Microsoft purchase is a little harder to grasp, but we have also learned never to underestimate the contrarian instincts of consistently successful hedge fund managers. This time around, Vetr.com users appear to to feel the same way.