A new Korean report today notes that "Samsung Electronics, Korea's most valuable company according to all financial analyses, is losing its luster because the company's key businesses are under pressure, resulting in foreign investors reducing their holdings of Samsung Electronics stocks."
According to Korea Exchange (KRX), "foreign investors sold 1.9 trillion won worth of stocks in listed companies from Jan. 1 to Jan. 18. This is more than half of 3.5 trillion won in stocks in listed companies sold by foreigners in 2015."
The report further noted that "Samsung Electronics was the main target of foreigners because foreign investors sold 540 billion won in Samsung stocks during the period,
A broad consensus to explain the ongoing weak moves of Samsung Electronics stocks is because of growing pressure in its profit structure because its semiconductor and smartphone businesses are still experience market turbulence.
Lee Jae-yoon, an analyst at Yuanta Securities, said that "Weak chip prices will be continued throughout this year. In smartphones, the rise of Chinese budget makers will also challenge the company's mobile division." Lee added that "a plan by iPhone maker Apple to tighten its parts inventory-level strategy to prepare for a weak demand will also pose another threat for Samsung's display, chip units."
One Samsung official is noted as saying that "Recovery in the global chip industry may come later than earlier expected; therefore, the issue is whether the S7 will have positive impact from investors."
Yet Samsung hasn't had a smartphone hit in over two years in light of the introduction of Apple's iPhone 6. And considering that the iPhone 7 is set to introduce some dramatic improvements this year which may include a new form factor, Samsung's S7 is unlikely to move the market needle in the direction they're hoping for later this year.
And although some growth fund managers are selling AAPL stock this quarter, value fund managers are adding AAPL to their portfolios because even if Apple's iPhone 6s sales are slightly lower than expected, and that's still unconfirmed, they know that Apple's profits will be stellar, a position Samsung can't even imagine.