Apple no longer hedge fund favorite, replaced by AIG, Google

The company is now the third-most-popular hedge fund pick, following insurance giant AIG and Google.

For three years in a row, Apple was the most popular stock among hedge fund managers, but according to new data from Goldman Sachs, it's on the decline.

Goldman Sachs' data, which was obtained and reported on by AppleInsider, indicates that insurance giant AIG was the most popular hedge fund pick last year, with 80 funds holding its shares. Google came in second place with 73 funds. Apple, which had previously led the space, is down to 67 funds.

Apple's declining popularity among hedge fund managers might have something to do with its ability to deliver returns. According to Goldman Sachs data, at the end of 2012, Apple delivered a total return of negative 12 percent. AIG and Google, meanwhile, were delivering an 11 percent return on shares.

Hedge funds buy up massive amounts of company stock, believing that shares will rise. When they believe shares will fall, they reduce their positions. Over the last year, Apple's shares are down nearly 11 percent to land at $448.85. That's a far cry from Apple's 52-week high of $705.07.

Apple's stock trouble comes despite the company generating billions of dollars each quarter. During the fourth quarter, in fact, Apple netted a $13.1 billion profit. Shareholders, however, have become concerned that it won't be able to keep up with its recent successes, given increasing competition from companies like Samsung and Google.

Interestingly, the decline is also due to hedge funds. Last week, Reuters reported that boatloads of hedge fund managers were dumping Apple shares . Viking Global Investors sold 1.1 million shares last quarter. Omega Advisors sold 266,000 shares.

Not all hedge fund managers agree that Apple is in trouble. David Einhorn, head of Greenlight Capital, increased his position in Apple stock last quarter by 20 percent.

Einhorn has recently made waves after suing the company over claims that it's too cautious with its cash . Einhorn argues that Apple should issue preferred stock, ensuring shareholders get more of Apple's massive cash holdings. Apple has agreed to look at ways to get more cash to shareholders, but has not promised anything. The company is currently offering dividends.

A few other technology companies made their way into the list of top hedge fund stocks: Priceline, Microsoft, and Qualcomm.

 

Join the discussion

Conversation powered by Livefyre

Don't Miss
Hot Products
Trending on CNET

HOT ON CNET

Find Your Tech Type

Take our tech personality quiz and enter for a chance to win* high-tech specs!