Despite hitting new highs in recent times and even regaining the top spot in global market value, Apple has been "bearish" by well-known investor and long-term shareholder Duan Yongping. What is the situation?
"Invisible and stylish" is the snowball ID of well-known investor Duan Yongping, who is famous for investing in Apple and Kweichow Moutai, and his comments often cause hot debate. The reporter sorted out Duan Yongping's recent comments and found that his recent posts have focused on his views on the trend of Apple's stock and his investment strategy, including selling call options and, if exercised, selling equivalent put options, waiting for a pullback.
As for Apple's stock price, Duan Yongping said, "At the current price, we can consider the short-term. In fact, I will sell some long and short." Duan Yongping believed that the current 30-year treasury bond bond interest rate is 4.44%, equivalent to 22.5 times PE, which is also the opportunity cost of holding any company. The interest rate of short-term treasury bond is 5.36%, equivalent to 18.66 times PE. "Holding=buying, I'm a bit conflicted."
According to the delivery note posted by Duan Yongping, he sold 19998 Apple call options for $230 due on June 14, 2024, with a price of $0.355, a total market value of $709900, and a total cost of $815500, on June 12, 2024.
A call option is a financial contract that grants buyers the right to purchase stocks, bonds, commodities, or other assets or instruments at a specific price for a specific period of time, but without an obligation. The seller of a call option is obligated to sell the asset when the buyer exercises the option. The buyer of a call option gains when the underlying asset price rises, while the seller gains when the underlying asset price falls or the option expires. The yield of a call option depends on factors such as the underlying asset price, strike price, maturity date, and premium. When the price of the underlying asset rises, the buyer of the call option will profit. If the price of the underlying asset falls below the strike price at maturity, the seller will profit from the premium, as the buyer usually does not exercise the option. In the US stock market, each call option typically represents 100 underlying stocks. Therefore, if you purchase or sell a call option contract, you actually have the right to purchase or sell 100 related stocks.
It is worth noting that as of the close of June 13th local time, Apple's stock price rose 0.55% to $214.24 per share, setting a new historical high with a total market value of $3.29 trillion, narrowly surpassing Microsoft and regaining the top spot in global market value. On the previous trading day, Apple's stock price briefly exceeded $220 per share during trading, and currently, Apple's stock price is still more than 7% higher than the exercise price of $230.
While the stock price of Apple continues to hit new highs, Duan Yongping's other "preference", Kweichow Moutai, has continued to decline recently. When a netizen asked him whether he would replace Apple with Kweichow Moutai, Duan Yongping said he would not replace Kweichow Moutai, and thought that its governance level could not be compared with Apple.
The latest 13F report for the first quarter of 2024 released by investment companies under Duan Yongping shows that the total value of 13F securities under its management is 14.196 billion US dollars, with the largest holdings being Apple, ranking as the 19th largest institutional shareholder of Apple, holding 64.58 million shares. Among the top five holdings, Apple holds 78.01%, Berkshire Hathaway holds 12.12%, Google holds 5.5%, Alibaba holds 2.98%, and Disney holds 0.65%.
As of the end of the first quarter, Apple had 4493 shareholders, of which 1612 increased their holdings, an increase of 8.04% compared to the previous period; 2154 institutions have reduced their holdings; 516 institutions have newly acquired Apple stocks; At the same time, 452 institutions have also chosen to withdraw. The total number of shares held by institutions is 9120407300, a decrease of 4.39% compared to the previous period. The proportion of institutional shareholding was 59.46%, a decrease from the previous period (61.70%).
In the specific institutional shareholding details, Vanguard Group Inc remains the largest shareholder, holding 1318.8596 million shares and a market value of 226.158 billion US dollars, accounting for 8.60%. BlackRock Inc followed closely behind, holding 104.19194 million shares, accounting for 6.79%. It is worth noting that Buffett's Berkshire Hathaway's shareholding has decreased by 116.1916 million shares, a decrease of 12.83%.
However, since the second quarter, Apple's stock price has continued to rise, and as of now, the highest increase from a lower stage has exceeded 30%.
Analysts believe that although Apple's artificial intelligence is a huge advancement for users, its profit potential for investors is still unclear. Although Apple released a new AI system, Apple Intelligence, on WWDC, and cooperated with OpenAI to integrate ChatGPT-4.0 into Siri, which triggered a sharp rise in the stock price, the current price of Apple's stock is still too high and there is a foam. From the analysis of Apple's revenue growth, EBIT profit margin, capital expenditure, and weighted average cost of capital (WACC), even under very optimistic circumstances, there is a valuation premium of 12.5% for Apple's stock. The market may be overly optimistic, mainly due to the neglect of data security risks brought by AI integration. Although Elon Musk's remarks may not have a significant impact on Apple's sales, user concerns still exist. Neglecting the relatively low dividend yield of Apple's stock and the limited potential growth space of the company's stock repurchase. Neglecting the historical cyclical pattern of Apple's profit growth and the possibility of the company transitioning towards service-oriented revenue.
The analysis also indicates that his analysis model has some risks, such as the possibility of the WACC assumption being too conservative, and the possibility of the EV/FCF multiple of Apple's stock continuing to rise. However, even considering these risks, it is still believed that the current price of Apple stock is too high, so the "sell" rating for Apple stock is maintained.