Premier’s Robbins sells Apple after growth fears

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Premier’s Robbins sells Apple after growth fears

Jake Robbins has dumped his holding in Apple, citing fears the tech giant’s sales could disappoint investors in future.

The manager of the top-performing £87.3m Premier Global Alpha Growth fund has warned that Apple is likely to disappoint those anticipating accelerated growth from the company.

As a result, Mr Robbins has sold his holding, originally purchased early last year, in spite of believing that the company’s valuation is not looking expensive.

He said: “Because this is Apple, expectations are such that people always think they will produce an unbelievable product.”

The world’s largest company has made impressive market share gains in Asia because the iPhone 6 met demand for larger screens, he said.

But Mr Robbins noted sales for this version have now begun to slow, and predicted the next upgrade cycle could be a year or more away.

He described the Apple Watch as “nice” but claimed it is unlikely to become a “mega product”, though he acknowledged that the Apple Pay mobile payments system could become a large recurring driver of income.

Investors have received an early indication that Mr Robbins’ fears may be accurate. Tech funds took a hit in July this year when Apple’s shares fell after results appeared to disappoint investors, in spite of record third-quarter iPhone sales, and quarterly revenue figures of $49.6bn, compared with $37.4bn in Q3 2014.

Apple shares slumped 7 per cent on 22 July when interim results revealed iPhone sales of 47.5m – 1.5m less than analysts had expected. The stock remains 17.7 per cent higher on a one-year view as of August 17.

Apple’s considerable weighting in US technology indices means tech-focused funds are forced to underweight the stock due to Ucits rules governing the amount investors can hold in a single company.

But funds including Henderson Global Technology, Invesco Global Technology, Axa Framlington Global Technology and Cavendish Technology held more than 9 per cent of their portfolio in the stock at the time of its share-price decline, according to FE Analytics.

Mr Robbins said he is more optimistic about companies that provide the components used in smartphones.

Holdings of his in this space include wireless handset chip supplier Skyworks, Avago Technologies, which focuses on industries such as wireless communications, and mobile technology firm Qorvo.

He said: “For these companies it doesn’t matter whether it’s Apple or Samsung who is dominant, because the same kit goes into the phones.”

He also noted that technology investors may be pleased with Google’s decision to create the holding company Alphabet, to separate its Google business from other projects such as Life Sciences and Calico. The move provides the opportunity for greater transparency, the manager said.

Mr Robbins, who does not own the stock, said: “Like Amazon, they use their core business to fund other projects that are a bit secretive.

“The shareholders will like that the costs of pumping money into driverless cars and other ideas will be transparent. Investors will be able to put the pressure on if some projects are costing too much.”