Apple’s (NASDAQ:AAPL) stock saw “a transition in share ownership” throughout last year, according to Bernstein analyst Toni Sacconaghi, with a new class of investors starting to increase their stake in the company. According to a Bernstein survey of more than 800 mutual funds, the percentage of growth-based mutual funds that owned Apple fell considerably over 2012, but, at the same time, value-based funds increased their share of ownership.
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According to The Wall Street Journal, the analyst said 82 percent of surveyed growth funds owned Apple in December 2011, but that number was down to 77 percent a year later. By comparison, while only 29 percent of value funds had the company in their portfolio by the end of 2011, the figure was up at 40 percent by the end of last year. Apple dropped almost 25 percent of its value from mid-September to the end of December. On Monday, it ended in the red again after a report said it had substantially cut down orders for iPhone 5 components after seeing low demand for the smartphone.
While the company’s stock was likely to stay “range-bound” in the near future on “worries about the company’s ability to eclipse first-quarter and full-year FY13 estimates and given questions about the trajectory of gross margin improvement,” Sacconaghi said he was maintaining his outperform rating and a $750 price target on the shares. That was because in the longer term, Apple offered “a compelling combination of attractive growth, reasonable price, and significant future option value.”
Sacconaghi said Apple was “transitioning from being a hyper-growth company to being a premium, branded consumer company … with increasing levels of recurring revenues.” He added that the company was also due for a dividend raise this year, another factor in its favor: “We believe that Apple’s announcement of a dividend in early 2012 was a significant catalyst for the stock, and that the company ought to consider raising its dividend this year, and potentially taking on debt to do so.”
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