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Henderson's O'Gorman: why we are selling Apple
on Jan 25, 2013 at 08:56
We are therefore already 6% underweight a cheap stock – Apple generated US$21 billion of free cashflow in the quarter and over US$44 billion in 2012 and now will have, assuming a 10% fall today, about 30% of its market cap in cash.
Our philosophy remains that over time most active mangers do not beat their benchmark so if we manage benchmark risk and add value against that over time we will end up the winners (has been the case for the last 10 years).
So, we are slightly reducing our position to take into account a slightly greater risk of the barriers to entry breaking down, offset by the cheaper valuation.
This will mean that we remain around about 6% underweight, a very big relative bet for a stock that we are neutral on with a positive bias.
This view can (and almost certainly will) change one way or the other over the next six months as we get more clarity to their product cycle in handsets.
Citywire Selection manager Stuart O'Gorman was A rated for seven months of 2012 as he delivered a 27.7% return on his Henderson Global Technology fund compared to the average manager's 15.2% in the Global Equities sector.
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