For HP, it has been dealing with a struggling PC market tied to Microsoft and Windows. Investors have noticed the change at HP with the shares hitting fresh 52-week highs and more than doubling off the lows seen last November.
At the end of the first quarter, there were a total of 47 hedge funds long HP, this includes the top hedge fund owner by market value, Relational Investors, with a $823 million position and making up 15.8% of its 13F portfolio (check out Relational’s portfolio).
Google Glass is a game-changer
As expected, Apple Inc. (NASDAQ:AAPL) CEO Cook downplayed the potential of the Google Glass product at the All Things D conference, admitting that he thinks “there’s some positive points in the product”, but sees the downside being limited due to poor “broad range appeal.” Cook believes that glasses reflect fashion and style, and for something to work in glasses, people must be convinced it is incredible. I believe Google Glass could be incredible.
The product launch is said to happen later this year before the Christmas holiday shopping season. The segment looks to be highly competitive with rumors that Microsoft, Apple, Sony Corporation (ADR) (NYSE:SNE), Research In Motion Ltd (NASDAQ:BBRY), and Samsung have been developing a glass product as well. Google Inc (NASDAQ:GOOG), though, will be able to secure first-mover advantage and that will greatly help the company.
Stacking up hedge fund interest
At the end of the first quarter, there were a total of 148 hedge funds long the stock, an 8% increase from the previous quarter. Of the hedge funds owning the stock, billionaire Stephen Mandel of Lone Pine Capital has the largest position in Google, worth close to $1.1 billion, accounting for 5.8% of its total 13F portfolio (check out Mandel’s top picks).
Going into the second quarter, Apple Inc. (NASDAQ:AAPL) had the same number of hedge funds long the stock as Google. There are a total of 148 hedge funds owning the stock and billionaire Ken Griffin of Citadel Investment Group had the most valuable position in Apple, comprising 4.2% of its total 13F portfolio (see Citadel’s big buys).
Outlook
Google Inc (NASDAQ:GOOG) seems to be on a path to $1,000. The key will be what happens afterwards. Investors need to know that there is a product in the pipeline after Google Glass is released. Even if Google Glass sales are better than expectations, investors will want to know what’s next. Markets are forward-looking. That is what happened to Apple Inc. (NASDAQ:AAPL). Investors didn’t see anything new after the iPhone 5 and sold the stock.
Google needs to be cognizant of this fact and have another big product in the pipeline if it wants to avoid the same fate as Apple. By judging from the past, I think we can expect Google to have another product ready to go once Glass is released. The company continues to invest in R&D and innovate and that’s why investors should continue to own the stock. For Google investors concerned over the short-term, shareholders should consider buying some protection with covered calls using an income-oriented strategy.
Marshall Hargrave has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Marshall is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article Avoid Investing in the Next Apple originally appeared on Fool.com and is written by Marshall Hargrave.
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