“Screen for growth stocks, and Apple (AAPL) has it all. In fact, except for Steve Jobs’ diminishing role in the company, it’s hard to find any serious, negative concerns. And yet, the stock is priced like a moderate grower with typical uncertainties,” John Tobey writes for Seeking Alpha.
“Everything (excluding Jobs’ health and position) argues for investors to pay more for AAPL,” Tobey writes. “Instead, they are paying less. I believe there are four possible explanations and three are likely the cause – especially #4.”
1 – There is some unknown, negative information
2 – Investors are avoiding risk, meaning U.S. stocks that don’t pay dividends and depend on future growth for their valuation
3 – To some (many?) Apple and Jobs have no or negative auras
4 – The unmentioned(?) risk of Job’s role change and possible absence
Tobey writes, “Apple stock is cheap – too cheap. Add in the qualitative factors and the valuation becomes uniquely outstanding – and that’s a concern.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “David E.” for the heads up.]
Churches rely on giving — investing if you will. In most Protestant churches, no matter how great the church on whatever levels, people tend to max out their willingness to give at around $1800 to $2200 a year.
That’s just the max its worth to them.
For churches that means either grow numbers to increase resources or put the screws on concerning tithing.
I wonder if investors have just gotten to the point with AAPL where they feel this is the max a computer company is worth, no matter the new whatever’s…
Yes, there’s probably a psychological barrier, especially when Apple is already the world’s most valuable company.
Huh? Lots of people give a lot more than this to their church. Tithing is 10%, not $1800 – $2200. People who tithe give and there is no “top out” number…They give 10%, or usually more. Where did you get these numbers?
Apple Stock is the Darling of the Hedge Funds, and they love to Short it. They have been “short” all year, and have managed to erase the good results of two record breaking quarters. They won’t cover until the new products are rolled out and look Great! Apple could prevent this from happening by splitting the stock. The Short Sellers know you can run apple down several dollars with ease, knock out the stops of regular investor, and get a big movement in money even if the percentage is not great! Split it Now!
Something they don’t mention, there’s only so much money in the world economy to be invested. This money has to shift around from one stock to another and there are a lot of high value stocks.
It makes no sense whatsoever. Why would analysts give such outrageous price targets (some around $600) and yet Apple can’t even hold $400. One group (analysts) sees Apple has having potential and the other sees no potential at all (investors). Unfortunately, only the people with the money (investors) matter. Consumers seem to be voting for Apple and investors seem to be voting against Apple.
Right now, Apple seems to be going nowhere fast, at least in the sense that the price target gaps are growing by the day. I can’t imagine how much revenue Apple is going to have to accrue just to get the share price over $400. It’s going to take an awful lot. If Apple doesn’t get every penny, the share price will be heading down even faster than it is today.
Why Apple stock is continually being called cheap and yet nobody is buying it, makes absolutely no sense at all. Investors are happily buying Intuitive Surgical, Netflix and Google but they don’t want to spend money buying Apple whose price targets are circling the planet as the revenue pours in. Something is amiss and and I sure wish I could catch a clue of the real reason why Apple upward stock movement is so sluggish.
Google’s stock price is higher than Apple’s. Do you think that makes Google a more valuable company?
The price targets in absolute dollars make no difference. It’s all tied to earnings via the P/E and other factors.
From the sound of your post, it appears you aren’t familiar with certain basic principles when it comes to stock prices.
There are still factors that make no sense in this regard. Why Netflix has such a high P/E vs Apple/s lower P/E. Or even Amazon for that matter.
I dont doubt there could be heavy manipulation of the stock. Or it could just be that Apple’s success is so extraordinary that investors (and their advisors) just can’t wrap their brains around it, thus they feel it could end at any moment.
Those must be the vaguest reasons ever. Only #2 is specific enough to be a real reason.
Main reasons for the stock being lower than it should be:
1. Apple is the largest (or second) Large Cap in the US (maybe world) but it’s growth is like a small or mid cap. This confuses the hell out of the stock market. They don’t know what to do.
2. As Dandy pointed out, Apple stock is a sure bet for shorting and hedge funds. It is so predictable they can manipulate the stock whenever they need to.
Those are really the only 2 reasons. Unusual growth characteristics for a Large Cap and massive manipulation.
I think your #1 point is spot on. I just mentioned that to the commenter above you.
“Apple stock is a sure bet for shorting and hedge funds. It is so predictable they can manipulate the stock whenever they need to.”
Until the SEC does something to remove this ability, due to the concentration of most outstanding Apple shares in the hands of the same kind of big money institutions that bankrupted us in the first place, this will be the main cause of Apple’s stock price being held down. Shaky, unsure, private investors get burned repeatedly by this manipulation and don’t come back or hang around to hold their ground.
This is plain as daylight.
Brining back the uptick rule is one partial cure for starters. Splitting the stock as Dandy above states is another, that would dilute the concentrated amounts and change the proportions.
The SEC needs to investigate and troubleshoot this urgently, because the lack of confident Apple investment, is a statement of anti trust in the entire market and wall street, which is dangerous.
+1 ✓
5 – I’m under deadline and had to crank out something, anything, or I’ll get fired.
Everyone seems to have forgotten the main factor: the U.S. and global economies FAR outweigh Apple’s relative strength because if so many people are out of work or aren’t earning enough, they won’t be able to buy those Apple products (or ANY products). I think that’s the main driving force…
Everyone seems to have forgotten the main factor: the U.S. and global economies FAR outweigh Apple’s relative strength because if so many people are out of work or aren’t earning enough, they won’t be able to buy those Apple products (or ANY products). I think that’s the main driving force keeping Apple’s stock down…
Apple has proven to be recession proof over and over. Sales are booming for Apple while all competitor sales in the industry have been shrinking for more than 10 consecutive quarters.
Especially in this kind of economy, today’s online technology is essential for private and business use and it’s here to stay. People need this connectivity and the productivity that it creates. Only Apple offers it in every flavor and for every budget with total integration of features in ALL Apple products.
In the USA – everyone loves the comeback story.
The under dog… the runner up scenario to finally win.
Well APPLE has seen that rise. It is the star now so USA rather play its cards on the other guy fro now