MacDailyNews Take: This will be Apple’s strongest quarter ever. iCal us.
“In fact, Apple’s stock is down 24 percent since Sept. 21,” Kelleher writes. “Months after people started predicting Apple would be the first trillion-dollar company in the world, the stock’s market value is having trouble holding above $500 billion. That’s still a massive figure, but it’s also cheap: Apple’s price-earnings ratio of 12 is as low as it’s been in ten years.”
“What happened? That question is driving a lot of speculative theories about Apple. But the reality is, sad to say, much more mundane,” Kelleher writes. “Some stock-clearing firms were raising the loan deposits necessary to buy Apple shares on margin. That would not only decrease speculative demand for the stock, it could prompt investors to sell shares if they didn’t want to pay the extra deposit. But the reason for raising the margin requirement was telling: Clearing firms had a “high concentration” of Apple shares on margin – more shares in a single stock than they were comfortable with. And that gets to the real reason behind Apple’s stock blues. Its market cap had gotten just too freaking big. Fund managers don’t like having too high a percentage of their holdings in a single company, even if that company is Apple.”
Kelleher writes, “Of course, all this could change in a single day of trading if a critical mass of investors becomes convinced there is good news ahead. Some of the remaining Apple bulls defending the stock believe this could well happen.”
Read more in the full article here.