Billionaires Dump Apple, Buy O’Reilly

I was sipping my lukewarm coffee the other morning when I read about a couple of hedge funds making moves that could only be described as both absurd and quintessentially corporate. Apparently, some of the big guns decided that Apple (AAPL) wasn’t as golden anymore. David Shaw’s D.E. Shaw & Co., for instance, sold 340,900 shares of Apple—trimming its stake by a paltry 6%—and, in a move that reeked of indecision, added 19,000 shares of O’Reilly Automotive. Meanwhile, Louis Bacon’s Moore Capital Management gutted its Apple position, selling 495,800 shares (a near-total 97% reduction), before buying a mere 240 shares of O’Reilly Automotive. It’s like watching someone who once swore by their morning latte suddenly switch to decaf.

Both funds still hold onto some Apple shares, but the pivot is telling. O’Reilly Automotive, by contrast, has seen its share price rocket by an astonishing 510% over the past decade—so much so that it recently underwent a 15-for-1 stock split. It’s as if a scrappy underdog suddenly hit the lottery, only to remind us that in the corporate world, fortunes can flip faster than my mood during a family dinner.

Now, let’s talk about Apple. Once a beacon of innovation with a brand so durable it could probably outlast my latest diet plan, Apple recently led the smartphone revenue race in the March quarter and even saw double-digit growth in its services segment—thanks to the App Store, cloud storage, and a touch of advertising magic. But the overall performance was about as inspiring as a stale croissant: revenue rose a mere 5% to $95 billion, and GAAP net income climbed only 5% to $24.8 billion.

The real letdown, however, is Apple’s struggle with artificial intelligence. Analysts had been salivating over the so-called Apple Intelligence features, expecting them to trigger an iPhone upgrade frenzy. Instead, the rollout has been as delayed as my mother-in-law’s arrival at family gatherings—leaving us wondering whether innovation has taken a permanent vacation. After all, it’s been seven-plus years since Apple unveiled anything that didn’t feel like a rehash of its past glory.

And then there’s the earnings conundrum. Wall Street is forecasting an 11% annual earnings growth, but when you strip away the effects of Apple’s stock buybacks (which repurchased 8% of its shares), earnings would have actually declined by nearly 5% over the past three years. At a current valuation of 33 times earnings, it’s no wonder some investors treat Apple like that one relative you politely ignore at holiday dinners.

On the flip side, consider O’Reilly Automotive. This behemoth of a specialty retailer, with over 6,400 stores across North America, might just be the underdog with a surprising upside. While tariffs on imported autos could sting most companies, O’Reilly might actually benefit from the 25% tax on imported vehicles—after all, if new cars are getting pricier, why not give your old jalopy some TLC? I even recall a chat with the cashier at my local O’Reilly, who winked when I mentioned the rising auto loan interest rates.

Their recent Q2 results are nothing short of promising: revenue climbed 6% to $4.5 billion, buoyed by 67 new store openings and a 4.1% same-store sales growth. GAAP earnings jumped 11% to $0.78 per diluted share, partly thanks to a strategic share repurchase of 6.8 million shares. And management isn’t resting on its laurels—they’ve raised their full-year guidance, forecasting an earnings increase of 9% in 2025.

Despite Wall Street’s forecast of a 10% annual earnings growth over the next three to five years and a valuation of 36 times earnings, there’s a certain charm to considering a small, calculated position in O’Reilly Automotive. In a market that often feels like a rigged game show, a dip in share price might just be the cue to buy in at a more reasonable multiple.

In the grand scheme of things, these moves are a microcosm of the corporate charade we’ve all grown accustomed to. Hedge funds, with their endless cycle of buying and selling, remind me of that one friend who’s always switching allegiances at cocktail parties. Apple’s seeming inability to innovate—juxtaposed with O’Reilly’s steady, if not entirely glamorous, ascent—is a perfect illustration of modern capitalism’s absurdity. So, as I watch the financial news unfold with a mix of cynicism and bemusement, I can’t help but wonder: in a world where even billionaires seem to be gambling on uncertain futures, perhaps it’s time we all learn to shrug it off. 🤷

2025-07-26 11:00

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