CEO Peter Tasca of Laureate BVI states, "We expect mutual funds to show lower earnings due to holdings in Apple stock. We estimate that 62% of all funds have exposure to Apple, our latest report shows funds have been selling Apple (AAPL) shares.”
Beverly Hills, CA -- (SBWIRE) -- 02/19/2014 -- Laureate BVI has cut the price target of Apple (AAPL) to $400 as it reported disappointing sales of the iPhone 5S and issued a forecast for the year that warned investors of the possibility of the first YoY revenue decline in over a decade.
In 2010 Laureate issued a Buy recommendation on Apple (AAPL) when the stock was at $240.00 per share. Laureate issued a Sell rating on Apple (AAPL) on January 16th locking in a return of 130% for their clients.
Peter Tasca, CEO of Laureate Trust states, “Our channel checks showed that the flagship iPhone 5S was not selling as many units as expected. We also monitored major retailers who were literally giving away the iPhone 5C. Furthermore, Samsung Electronics, a major supplier of hardware to Apple, announced slower sales which we took as a sell signal for the industry as a whole.”
Apple chief Tim Cook stated he saw a nearly 30% increase in Apple’s (AAPL) sales to Greater China last quarter of the iPhone 5S and 5C through their partnerships with China Unicom (CHU) and China Telecom (CHA).
Tasca points out, “Android OS and Apple OS have literally the same functionality. I don’t believe China will save Apple, our research shows the rest of Asia Pacific was down 9%.”
“Apple shares will find support in the range of US$400, and have potential to move up higher if the company can add new product lines. Apple is in a very difficult situation, they have over $150B in cash and iPhone momentum is losing steam, I would like to see Apple be more innovative with their cash like Facebook (FB) and build a diversified portfolio”, according to Tasca.
Tasca further states, “Apple (AAPL) is a mature company and it has had a great 10-year run, its going to take a major product launch to get this stock over $600 a share. Our view on the stock is purely on a technical basis, we see Apple (AAPL) at US$400 by year-end.”
Apple will also feel pressure from funds and individual investors. Apple is currently 18% of the Nasdaq 100 index giving it twice the weighing of No. 2 Microsoft (MSFT). Mutual funds hold about 62% of Apple’s outstanding shares.
Of the remaining 38% of outstanding shares in Apple, nearly 17% of all individual investors own Apple shares.
According to Tasca who has returned 23% in net profits for 2013, “With such widespread ownership we only see downside risk. If Apple disappoints again you will see these funds and individuals get defensive and protect the profits in their portfolios. Keep in mind with so much ownership, there is no one left out there to buy the stock.”
Wall Street sat up and took notice when Laureate BVI launched a retail fund with a €2,500 minimum investment. CEO Peter Tasca says, “We’ve had huge demand for our retail fund. We’ve spoken to investors that have lost anywhere from €30,000 to €30,000,000 over the last few years and want a fund that can profit in any market environment.” Laureate BVI Fund returned 42 per cent in 2008 amid the global financial crisis with their market neutral strategy and returned 33 per cent in 2009.
About Laureate Trust
Laureate Trust provides expert portfolio management that achieves optimal results. The proven trading strategies are based on four principles: diversification, technical analysis, trend following and risk management, which combined have the potential to profit from any economic situation. In 2013 this multiple platform strategy returned +23.01% net of all fees.
For more information on Laureate Trust, contact Private Client Group +1-310-492-5301.