This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Hedge Funds Hate These 5 Stocks -- but Should You?


Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

I guess it's not a huge surprise that Apple (AAPL - Get Report) tops hedge funds' hate list -- everybody hates this stock right now. Shares of the $439 billion tech behemoth have fallen by around 25% in the last six months, dropping like a rock while the rest of the S&P 500 actually climbed 8%.

>>5 Big Tech Stocks to Trade (or Not)

The selling was enough to scare hedge funds away from shares; funds unloaded 1.27 million shares of Apple last quarter, dropping their combined stake in the stock by $1.5 billion.

Apple has been getting a lot of attention -- and rightfully so. As the biggest publicly traded company in the world, Apple's fall is a big deal. But I've said before that this is a case of a stock price that's diverged considerably from this company's value. If Apple were a tenth of its size, it wouldn't be under the same pressures. Now, though, its $439 billion market cap and $467 per share price tag look scary for investors; the bigger they are, the harder they fall, right?

Not quite. Apple's growing market share, impressive diversification, and gargantuan cash cushion impart a fundamental floor on share prices. Management has shown a willingness to at least talk about returning more of Apple's $137 billion in cash to investors, and that's an excellent step in the right direction. In the mean time, investors shouldn't ignore the fact that Apple created more than $41 billion in free cash flows last year. Hedge fund managers are selling this stock on a kneejerk reaction to price -- and they're leaving money on the table.

All of that said, I'd recommend waiting for the technicals to change before jumping into Apple. This stock is still in a downtrend, and as long as more investors keep selling at a kneejerk, you can jump in at a better price.

I also featuredc Apple recently in " Apple Doesn't Suck -- but Its Stock Does."
2 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
ABC $78.00 -7.46%
AAPL $93.24 -0.41%
GE $29.89 -0.60%
MSFT $49.94 0.14%
WFC $48.96 0.04%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs