In a research report Friday, Morgan Stanley (MS)’s Katy Huberty said that Apple (AAPL)’s institutional ownership — including hedge funds, banks, mutual funds and other types of financial firms — was low compared to other large-cap tech names such as Hewlett-Packard Company (HPQ) and Microsoft Corporation (MSFT).
Huberty says that bodes well for Apple’s stock in the near term ahead of the iPhone 6 product cycle and iWatch launch and perhaps other products.[via IBD] “The top 100 holders of Apple are significantly underweight as compared to an overweight bias for every other large-cap technology stock in our analysis,” Huberty wrote in her report. “We believe this sets up well for further share price upside heading into the iPhone 6 product cycle, iWatch launch and potential new services.”
“Allocation to Apple as a percentage of total portfolio among top 100 holders ticked down 20 basis points quarter-over-quarter from 2.2% exiting Q4 2013 to 2% at the end of Q1,” the analyst said, adding that major institutional investors, whose current AAPL allocation is at the low end of the historical range of 1.6% to 4.5%, will likely increase their allocation in the iPhone maker ahead of these launches, which means there is upside ahead for the Apple stock.
Morgan Stanley continues to maintain its “overweight” stance on the equity. The investment bank’s baseline PT is $690 with a “bull case” outlook of $860 per share.
Shares in the $529 billion company rose 1.13% on Friday to close at $614.13. They are up more than 41% over the last 52 weeks.