Skip to main content

NEW YORK (TheStreet) -- Judging by Apple's (AAP) - Get Free ReportL share price over the past 12 months or so, it's pretty clear that institutional investors are not taking to the company like they did once before. One analyst on Wall Street broke down why.

Morgan Stanley analyst Katy Huberty, who conveniently always gets to ask the first question on earnings calls, noted institutional ownership among Apple and Tesla Motors (TSLA) - Get Free Report, but most notably Apple, are way under-owned by big investors. "We looked at ownership data since 2009 and found that the top 30 shareholders tend to own 30-50% of shares outstanding," Huberty wrote in a report. "A few stocks, i.e. AMZN, GOOG (covered by Scott Devitt), MSFT (covered by Keith Weiss) and HPQ, currently have near record high if not the highest top 30 ownership of shares outstanding in the last five years. In contrast, Apple's current top 30 ownership share is at a record low 30% compared to 36% five year average and a peak of 40% in 2009."

According to Huberty's findings, the top 30 shareholders allocate just 2.2% of their portfolio to Apple, compared to a high of 4.1% in the past five years and Apple's current 2.9% weighting in the S&P 500. Essentially, Huberty is saying that institutional investors are overweight everything but Apple.

Why is this?

Basically, institutional investors don't believe in the future of Apple, Huberty noted.

"We view low institutional ownership relative to other large cap mobile technology stocks as underestimating Apple's ability to participate in new categories like wearables and services. In wearables, we see iWatch contributing 32 to 58 million units in the first 12 months post launch based on the historical installed base penetration ramp experienced by iPhone and iPad. In services, the combination of fingerprint sensor, security features in the A7 64-bit processor, recent sensor and mapping-based acquisitions, with nearly 600M App Store accounts and 380M Bluetooth low energy devices in the wild present opportunities in mobile payments and advertising services."

There it is, ladies and gentlemen. That's why Apple's stock has been stuck in the doldrums for the past year.

AAPL data by YCharts

Image placeholder title

It's now up to Apple CEO Timothy D. Cook and others to prove them wrong.

Shares of Apple were trading down 0.6% to $518.96 in trading Wednesday.

--Written by Chris Ciaccia in New York

>Contact by Email.

Follow @Chris_Ciaccia