Stock market

‘Warren Buffett of Great Britain’ just bought 262,959 shares of this wonderful stock.

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One fund manager I keep a close eye on is Terry Smith. Often referred to as ‘Britain’s Warren Buffett’, he has an exceptional track record of long-term stock market performance, returning around 15 per cent every year since his inception. Fundsmith Equity Fund back in 2010

Recently, Fundsmith filed its 13F report with US regulators, in which Smith disclosed the US stocks it bought and sold in the first quarter of 2024. apple (NASDAQ: AAPL).

Terry Smith’s Recent Purchase Activity

There are no new holdings for Apple Fundsmith. For about a year and a half now, Smith has held a small position at the company.

Recent 13F filings show it increased the size of its holdings in Q1. During that period, the fund manager acquired 262,959 shares (a stock worth about $50 million at today’s share price) in the iPhone maker. This increased his position size by 19.7%.

It’s worth noting that even after this recent buying activity, Apple is still relatively short for Smith. At the end of the quarter, tech stocks represented just 1.07% of its portfolio. So he hasn’t gone ‘all in’ on it yet.

I also bought Apple shares.

I find this commercial activity quite interesting. This is because I did exactly the same thing in Q1.

Back in March, when Apple shares were under pressure and trading around the $170 level, I bought a few more of them for my portfolio.

Dip buying is paid. Since then, the stock has rallied to around $190 after the tech giant announced its largest-ever share buyback.

A core holding in my portfolio

Apple is now a ‘core’ holding for me. Currently, it is the fourth largest individual stock position in my portfolio.

Stock is not perfect. Right now, Apple isn’t growing much revenue. Meanwhile, the company’s valuation is quite high (the forward P/E ratio is 29).

However, I believe in the long-term story here. Sooner or later, we’ll likely see Apple release AI-powered iPhones (currently in talks with OpenAI to put ChatGPT on its phones). When that happens, I think we’ll see the biggest product refresh cycle in at least five years. This can put a rocket under the income.

Another reason I’m happy is that the company has moved into the payments and digital healthcare markets. These are two industries that have tremendous potential for long-term growth. I’m personally using Apple Pay for more and more purchases these days.

Of course there are risks here. For one, competition is increasing in China, where there are some really innovative players in the smartphone market. This could lead to lower growth and a contraction in valuations for Apple.

However, by buying shares on the dip – as I have always done with Apple – I can potentially reduce my risk with the stock.

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