Apple Reached $2T But…

Apple fans cheered yesterday as their favorite stock rose above $2T mark for the first time and the first US company to reach that milestone, thanks to big brothers buying. It went public in December 1980 at $22 a share, struggled above $100 in 2016 before long QE inflated the stock to round $463 yesterday. Boy, had you bought that stock then you would have been richer by the factor of 21. So you think.

Little that you know for the past 5 years, though the stock price was steadily increasing; the assets of the company was steadily declining.

For now, we are not quite sure what the investors are buying other than the rising present value of the liabilities of the company. If investors believe that spot price reflects the present value of an asset, then with this logic, investors obviously is expecting Apple’s assets to increase over time.

Nevertheless..

We know that logic does not rule the markets but emotion does, as John Maynard Keynes pointed out that “markets can remain irrational longer than you can remain solvent”. Our guess is maybe, market is playing catch up as price change from 2016 to 2019 didn’t quite reflect the change in assets from 2016 to 2018.

At over 30 times PE and 3 times PEG plus 0.71% yield, below are the 5 banks that invest and divest per SEC 13F filing last June, sorted by change in their holding:

INVEST

1. Nordea Investment Management +9.5m shares (+106%)
2. BNP Paribas Arbitrage +4.71m shares (+39%)
3. Credit Suisse +14.23m shares (+23%)
4. Citigroup +9.27m shares (+16%)
5. Deutsche Bank +13.26m shares (+8%)

DIVEST

1. Toronto Dominion Bank -39.96k shares (-98%)
2. CIBC World Markets -797.54k shares (-57%)
3. Goldman Sachs -23.63m shares (-36%)
4. Barclays -9.46m shares (-21%)
5. Mitsubishi UFJ -3.69m shares (21%)

Disclosure:

I do not have any holding in Apple (AAPL).

All views and opinions expressed are of personal in nature and do not represent any of the institutions mentioned. All information and data provided are for educational and information purposes only. None of our views and opinions, anywhere published should be construed as a recommendation of solicitation to invest and/or trade any financial instrument. Please consult any licensed investment advisors before you commit to any financial decision.