Should You Be Worried These Investors Are Reducing Their Apple Stakes?

Apple’s (NASDAQ:AAPL) falling share price seems to have scared some of its biggest investors. The $85 billion Fidelity Contrafund, the largest active shareholder in the iPhone maker, reportedly cut its holdings in the company by 3.1 percent in December.

The fund held 11.56 million Apple shares worth $6.15 billion at the end of December, accounting for 7.3 percent of its holdings. That was down from an 8.2 percent share at the end of November when it held 11.92 million shares, Reuters said. Apple is down 35 percent from a closing high of $702.10 in mid-September, when excitement for the iPhone 5 was at its peak.

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“The stock has been disappointing in the last quarter or two,” portfolio manager Will Danoff said in a Fidelity Viewpoints interview. “Competition has definitely intensified in the smartphone and tablet markets.”

However, Danoff stressed that he remained bullish on the stock and that Apple was still the top holding in Contrafund. “Apple has been generating a billion dollars of free cash flow per week,” he said. “In the last two years, the company has added $100 billion of revenue without needing any additional working capital.”

Other Fidelity-owned funds are cutting down in the iPhone maker as well. According to Barron’s, the $14 billion Fidelity Magellan fund held about 100,000 Apple shares worth $566 million on December 31, down from 1.7 million shares worth $1.1 billion on September 30. By percentage, the share of Apple in the fund fell from 7.3 percent to 4 percent. The $43 billion Fidelity Growth Company cut down to six million shares worth $3.2 billion from 6.1 million shares worth $3.6 billion. Also, the $17 billion Fidelity Blue Chip Growth reduced its 2.5 million shares worth $1.5 billion in July to 2.3 million shares worth $1.25 billion in December.

Fidelity Contrafund has been the best performing large-cap growth fund over the past 20 years, posting an annual total return of 10.59 percent, Reuters said. It posted a 6.51 percent return in the fourth quarter. It is also Apple’s second largest shareholder after the Vanguard Total Stock Market Index Fund.

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