“Investors have become preoccupied with the threat to profits as Apple rolls out lower-margin devices like its iPad mini and packs pricier features into its new iPhone 5,” Kopin Tan writes for Barron’s. “Weakness at Apple’s suppliers has also fanned fears about waning demand just as long-term investors took profits ahead of potentially higher capital-gains taxes in 2013. Many of these concerns now look overdone and increasingly are factored into the stock.”
“Apple customers have downloaded 40 billion apps to their iPhones, iPads, and iPods since the 2008 launch of its App Store—half of those in 2012 alone,” Tan writes. “Also, Apple sits on more than $29 billion of cash and more than $92 billion in other securities, pays a 2% dividend yield, and still fetches just 10.6 times 2013 profit.”
Read more in the full article here.
Obviously there is no hard evidence to convince potential investors to purchase AAPL at this point. Apple is doomed. They might as well what Mikey?
Screw these smartphones they’re not going anywhere. What we need is a watch … Right, Richard?
The amount of money Apple is making has nothing to do with the share price. What needs to be done is to make investors realize that Apple is making money and the company isn’t doomed. Isn’t it up to Tim Cook to show that Apple is a worthwhile investment? If Jeff Bezos is able to do that with Amazon, then why isn’t Tim Cook able to do that with Apple? Why is it Apple is seen by Wall Street to have nearly no growth two years from now?
Certainly, there can be no hard evidence of Apple’s future, just like there isn’t any hard evidence of Android or Amazon’s future. The future is just that… unpredictable and unknown. Loss or gain of market share is no solid indication of the future as things change along the way. I honestly don’t understand why Apple is being punished for having an indefinable future. Any stock could be punished for that at any particular time. The disclaimer is always made: Past performance isn’t a true measure of future performance. So, why should Apple’s future performance mean so much to it’s current share price if that’s what actually causing Apple’s share drop? If that’s the case, Apple’s past performance has been pretty decent over the last five years. I can’t make heads or tails of what’s going on.
“What needs to be done is to make investors realize that Apple is making money and the company isn’t doomed.”
1) Stop market manipulation.
2) Stop letting “financial analysts” write lopsided opinions and errant hit-whoring blogs. Investor magazines with journalistic integrity (such as Forbes) think blogs are a free golden ticket to spew whatever BS they want.
correctu is right. Investor sentiment is fueled by the unholy matrix—blogs within magazines, indie blogs, analytics firms, supply-chain observers, institutional investment newsletters, and all the rest—and all of subject to page hit counts, those irresistible sources of revenue that weaken any incentive to curate or fact check.
And of course there are all the technically unsophisticated news outlets uncritically distilling all that clamor, sounding Pavlovian alarms, lending undeserved credibility to what later turns out to be non-pertinent, overblown sandbagging.
True, other forces are at work, but read enough of these bleatings and it’s not hard to spot the virality of certain reports and rumours, showing an underlying attachment to sensationalism. When it comes to volatile tech stocks, the slightest thing can spook the market, even a dubious speculation by someone with a poor track record, if it happens to go viral.
The trouble is, with either outright manipulation by traders, or with stories and rumours, there is no form of effective regulation to stop these excesses. Clearly shame does not work.
We need to fully understand the BIG difference between Investors who buy in hopes of company growth- long term.
And speculators who want to buy low and sell high… As quickly as possible and then move on.
Today, many are speculators NOT investors.
Just a thought.
En
I’m being totally facetious. What part of Corruption in the U.S. Government & Wall Street don’t you people understand? Now I’m not being facetious. Am i?
Threat to apples profit? Who makes profit anywhere close to apple. Profit is one thing apple business does best. This is a bogus claim. More FUD. Fud drives down stock price, plain and simple. $200 per share loss in 3-4 months? Investors are weak minded and driven by imaginary fears.
Apple has huge growth potential in china and other areas of world that with make today’s incredible profits pale. Apple has huge growth potential in its “intense interest” project area of tv. Doubters have been proven wrong again and again with apple… Watch apple amaze again soon.
Apple missed earning expectations twice. Thats what brought the stock down. If it beats now it will go up if not it will continue downward. Its pretty simple.
Apple always meet their own projected expectations and even exceed them, just not Wall Street’s made up number who keeps upping the ante ridiculously making it near impossible for Apple to ever look good in their eyes.
Imagine the Olympic Games run by Wall Street. And a new world record is set by the winner of the main event; and the umpires award a bronze medal because they expected rather more of the athlete. That’s Wall Street for you.
CJ, Great example. Just great. “The 32 second mile was strongly expected today cause anal…..yst have been evaluating the price of wheat in Russia and the crab count coming in from the Bearing sea. Therefore no medals will be given cause the contestants did not impress Wall Street.
/s Any thoughts. ??
Apple’s stock price has fallen, because it needed to fall. There is vastly more competition in the smartphone business than there was and the market for smartphone users that is left is not in the high income end and thus unwilling to pay what Apple charges. That is why Samsung is selling more phones. Besides, Apple elected to go with smaller screens, but the younger generation does more video and wants larger screens. I have a Note II and don’t use my iphone at all. Besides, the Chinese will clone both Apple and Samsung and capture their own population with much cheaper phones. It is just reality.
Keembo,
“There is vastly more competition in the smartphone business ”
Yes there are more phones out there. Apple does not have the “marketshare” they only have the “profit share (70+%). If the only thing you understand is market share, they join the 1950’s.
So, tell me again why Selling more phones is a good thing? Does it work for Dell???
And yes, its important to be seen as the market leader… but just because you make tons of stupid commercials, that does not make you the market leader. And yes, the chinese and north Koreans will clone Apple phones and features… Samdung come to mind. But if they lose these lawsuits as they are starting to, they could fall to a has been in no time.
PS, cheap does not make wanted. Ever heard of Prada, etc.??
Just a thought.
en
Among my non-techie friends, I do not detect a groundswell towards Apple. My non-tech friends seem so pleased with their new Androids, and I am baffled how they could like that clunky, unaesthetic OS interface, but they do. I can’t understand it, but lots of non-tech people don’t care a hoot about Apple.
That’s weird… I have just the opposite experience with my friends, about 80% of them currently use an iPhone… Most started with an Android phone then switched to iPhone and are very glad they did. These are non-techie people as well, half of them don’t even own a computer – they use their smart phone for pretty much everything and all have said the iPhone is a much better mobile computer than their previous Android phones were.