New Buys By Top Funds: BofA Returns, But Apple Goes Missing

While Bank Of America (BAC), Cigna (CI) and Texas Instruments (TXN) all once again earned a spot on the latest list of new buys by top-performing mutual funds, the most noteworthy name may be the one that didn’t return: Apple (AAPL).

X Apple had made the list for two consecutive months as the stock continued its climb from a bottom it reached in May 2016. In January’s report, 65 top funds invested a total of nearly $1.8 billion in the tech giant.

But with analysts seeing a slowdown in iPhone sales, institutional investors may fear the explosive growth of the past may be coming back down to earth as the company settles in to its new headquarters nicknamed Apple Spaceship in Cupertino, Calif.

For the December quarter, Apple beat estimates for sales and earnings, but came up short on iPhone sales and guided lower for the current quarter. Apple’s stock has now fallen sharply below its 10-week line in heavy volume, a sign of institutional selling. Apple is currently testing support at its 40-week line.

Billion-Dollar Buys

Four stocks on the list received over an estimated $1 billion each in investments from the top funds over the past three months: Bank of America, medical sector stocks UnitedHealth (UNH) and Abbott (ABT), and semiconductor pioneer Texas Instruments.

BofA is up more than 20% from a breakout in September, and has shown resilience – and support at its 50-day line – in the face of increased volatility and selling pressure in the general market.

Abbott has given back much of the 13% gain in made from the buy point it cleared in December. The maker of generic pharmaceuticals and diagnostic systems is now trading 2% above the entry.

UnitedHealth broke out earlier this month, but has pulled back and is now 3% below the 231.87 buy point.

Texas Instruments has also been retreating, although it remains about 19% above the 84.34 entry it cleared in September.

Bases, Breakouts & Buy Zones

With the Nasdaq and S&P 500 showing  increased selling pressure and volatility, many stocks on the list, such as Orbotech (ORBK) and DMC Global (BOOM), have seen their recent breakouts fail.

Others, such as the New York Times (NYT), have managed to keep climbing. The “Paper of Record” broke out of a double bottom on Jan. 12 and is now more than 20% above the buy point after jumping over 11% on today’s earnings beat.

After pulling back in recent days, defense stock Hexcel (HXL) is testing support at the 64.03 entry it cleared on Jan. 8.

Louisiana Pacific (LPX), which provides engineered wood products for home construction, has splintered recently and is now back below the 29.54 buy point it first cleared on Jan. 24.

Modine (MOD) has been holding up better than many other names on the list, although it’s had its share of wild price swings. It’s currently still trading just within the 23.25-24.41 buy zone.

Modine, which makes thermal management systems for the building, industrial and refrigeration markets, initially sank on its recent earnings report, but bounced back into buy range in heavy volume last week.

Stocks Being Sold

JPMorgan Chase (JPM) topped the list of stocks being sold, with 59 net sellers (127 funds selling minus 68 buying). Despite that, just like its banking rival BofA, JPMorgan has continued to climb higher.

No. 2 on the sell side was Aetna (AET), which had 58 net sellers (96 funds selling minus 38 buying). Last year, CVS Health (CVS) announced it was buying the managed care provider.

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