Apple Inc. (AAPL) & Other Stocks that Lose Billionaire Investors’ Support

Billionaires represent a class of investors that have time and again profited from their understanding of financial markets. Hence it is no surprise that we track these accomplished investment managers and their firms at Insider Monkey. Billionaires most often manage large amounts of money and usually acquire significant stakes in some of the largest companies, such as Apple Inc. (NASDAQ:AAPL), and Alibaba Group Holding Ltd (NYSE:BABA). However, the data from the latest 13F filings showed that these two companies have seen a slight decline in popularity, alongside several others, including Micron Technology, Inc. (NASDAQ:MU), Mondelez International Inc (NASDAQ:MDLZ), and Baidu Inc (ADR) (NASDAQ:BIDU).

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We track the activity of hedge funds and billionaire investors, because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge funds have been underperforming the market in recent years. However, this was mainly because hedge funds’ short picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular small-cap stock picks in real time since the end of August 2012. These stocks have returned 118% since then and outperformed the S&P 500 Index by around 60 percentage points (see the details here).

A total of 15 billionaires had an aggregate investment of $12.16 billion in Apple Inc. (NASDAQ:AAPL) at the end of June, a small slide from 16 billionaires with $13.05 billion worth of stock at the end of March. David Einhorn (pictured above) trimmed the exposure of his fund, Greenlight Capital, to Apple by 1% during the June quarter to 7.38 million shares valued at $925.96 million. Lately there have been concerns about Apple Inc. (NASDAQ:AAPL)’s future prospects owing to a slowdown in the Chinese economy, since the country is the second largest market for the tech giant after the US. However, the iPhone 6S hit the stores yesterday and analysts expect between 12 and 13 million devices to be sold over the first weekend, and reaching this target might changed the investors’ mind regarding the company.

Speaking of a slowdown in the Chinese economy, the China-based e-commerce mogul Alibaba Group Holding Ltd (NYSE:BABA) is finding itself in increasingly murky troubled waters. The company’s investor-relations chief Jane Penner recently disclosed that Alibaba’s gross merchandise value will be mid single digits lower than initial expectations. Billionaire David Tepper recently admitted to closing his position in Alibaba Group Holding Ltd (NYSE:BABA), which was Appaloosa’s second-largest new holding at the end of the second quarter comprising some 1.36 million shares valued at $111.89 million. Although the number of billionaires invested in Alibaba increased to 15 at the end of June from 14 at the end of March, the aggregate value of their of their holdings slumped to $2.03 billion from $2.86 billion. While Alibaba Group Holding Ltd (NYSE:BABA)’s stock traded nearly sideways during the second quarter, it is down by more than 42% so far this year and lost 36% from its IPO price in late September 2014.

Micron Technology, Inc. (NASDAQ:MU) experienced a considerable loss of interest from billionaires during the April – June trimester as the number of those invested in the company reduced to 11 from 15. Consequently, the total value of their holdings slid to $1.73 billion from $3.66 billion in the same period. Micron Technology, Inc. (NASDAQ:MU)’s stock has cratered by more than 57% so far this year. However, David Einhorn hasn’t given up on the company and instead increased Greenlight Capital’s holding in Micron by 14% during the second quarter to 37.95 million shares valued at $714.97 million. In his letter to the investors for the same quarter Einhorn pointed out that the excess DRAM inventory is being absorbed and the stock is being oversold on fears of supply glut which are overplayed, but provide an enticing investment opportunity (see more details).

At the end of the April-June quarter only 10 billionaires had total investments worth $3.19 billion in Mondelez International Inc (NASDAQ:MDLZ) down from 14 high net worth individuals holding $4.06 billion in shares at the end of the first quarter. The lack of enthusiasm has precipitated despite an almost 18% surge in Mondelez’s stock price during the second quarter. Bill Ackman is one of the billionaires who is bullish on the company as he acquired some 120.27 million shares of the snack food and beverage company. In a recent interview on CNBC Ackman laid out his bullish thesis and touched upon the potential for the company to significantly improve its margins in the future.

Another Chinese company on this list is the $47.48 billion Chinese-language internet search provider Baidu Inc (ADR) (NASDAQ:BIDU). A total of 11 billionaires held the company in their respective fund’s equity portfolios at the end of June, a decrease of six from the end of March. The aggregate value of these investments fell to $1.43 billion from $3.09 billion held in shares. Baidu Inc (ADR) (NASDAQ:BIDU)’s stock price has tumbled by about 41% on a year-to-date basis. Andreas Halvorsen’s Viking Global cut its stake by 48% during the second quarter to 1.29 million shares of Baidu Inc (ADR) (NASDAQ:BIDU) valued at $255.91 million.

Disclosure: None