“As Apple’s share price has fallen over the last four months, dropping some 25% percent after first breaking the $700 mark in September, I’ve again become interested in the stock,” Vince Martin writes for Seeking Alpha. “The fundamentals, of course, remain outstanding. Even an AAPL bear would admit that, on a purely numerical basis, Apple looks cheap. At Friday’s close of $520.30, the company’s trailing P/E sits below 12. This despite revenue and earnings growth of 44 and 59 percent, respectively in fiscal 2012 (ending in September). The company’s cash hoard of $121 billion could buy all but 43 of the world’s publicly listed companies, including Amazon.com.”
“Those risks are real. As dominant as Apple is now, the tech world — particularly its consumer segment — is a highly competitive sphere, and leaders can turn to laggards exceedingly quickly,” Martin writes. “Barely more than two years ago, RIM’s Blackberry was the leading smartphone platform in the U.S.; it’s now a distant third.”
MacDailyNews Take: RIM is Dead Company Walking precisely because of Apple.
Martin writes, “The idea that Hewlett-Packard and Dell would even consider exiting the consumer PC business would have been laughable just a few short years ago.”
MacDailyNews Take: Yet, it’s now reality – because of Apple.
Martin writes, “So, how can Apple’s enterprise value fall to $300 per share, or roughly $282 billion? The same way any other stock’s value can fall:”
1. Multiple Compression
2. The “Black Swan.”
3. Portfolio Re-Balancing
4. Below-Average Earnings
“In short, I do understand the bear case for Apple, and I think the risk of it becoming just another tech company — if not a fallen star like RIM, Hewlett-Packard, or Nokia — is material to the stock. But so much of it is priced in at current levels, giving the stock a substantial downside cushion… All told, the risk of a fall at Apple like those of RIMM (140 to 10), HPQ (65 to 16), or NOK (40 to 4) seems sharply remote. Even a drop to 400 from 520 seems to require outright struggles that Apple has managed to avoid for most of the past decade,” Martin writes, “With an apparent downside cushion, investors can then focus on the upside, which remains vast… The risks appear to be acceptable, as a drop to $400 would require a confluence of unlikely events.”
Much more in the full article here.
In other words, he has no clue how or why Apple could or should get to $400 per share.
So, if absolutely everything goes wrong and the world basically ends, Apple could drop to $400.
But if only one or two easy things go right (or if they simply stay the course), we’ll be seeing $1000, or even $2000 a share one day soon.
Any investor should be jumping at that scenario. The risk-reward equation is stacked firmly in AAPL’s favor.
Wow, talk about a roundabout web bait article that’s much ado about nothing! Most of us Apple bulls are not worried about a $300 or $400 Apple stock price ever happening anytime soon as they continue their ascent for years to come. is appointing that Wall St. Can’t believe their good Apple fortune and are so pessimistic about where Apple is going ascribing scenarios that only much inferior companies might succumb to. It makes you realize how much smarter you are than most of these dum-dums.
Except Apple has had none of these things happen and yet the stock is falling. Even the last quarter was record earnings for Apple and yet the ANAL-ISTS dropped Apple stock like they were making blackberry’s or something. Why is Google so high? What have they done? Record earnings like Apple, NO! Great products like Apple, NO! Cash in the bank plus no debt like Apple, NO! I just see no point to knocking down Apple stock when all signs of performance are above average and the risk with no debt and cash in the bank makes it so low. Oh and the maps thing, has it really hurt sales of iPhone 5, NO!!!!!!!!!!!!!! You know why? Because it was blown out of proportion B.S! I’ve used it several times with perfect results.
Driverless cars?
So when one of those inevitably crashes so will Google’s stock?
Sold at $700, but would buy at $400
Well played! I wish I was so smart.
Next time Apple reaches $700 I will sell
Next time AAPL hits $700, it won’t be stopping there.
You will buy back but with less capital after paying capital gains tax and you may have payed the higher short term capital gain tax rate penalty. Not to mention when to hit the buy button – very hard to time re-entry with money normally left on the table.
+1
Same here Brunet. I took my profit at $700. I was thinking about getting in a little bit this week but may hold off now that the Wall Street Journal is reporting a reduction of iPhone five parts orders. Could be due to the impending iPhone due this June? Perhaps an additional smaller iPhone too? Whatever the case, this could drop the shareprice appreciably.
Wow! That $700 decision looks so good now Brunet. So glad I pulled the trigger. I thought about being greedy and staying in longer but I knew it was time. We’re certainly headed back under $500 today. I certainly feel for those people who didn’t get out at the top. So much for buy and hold. Damn!
I don’t have the numbers in front of me or a link to an article, but I guarantee that in 2010 the Blackberry was NOT the leading smartphone platform in the U.S.
Show me the company with a portfolio of superior products and outlets to take on Apple and I will believe $400/share.
Tea party logic
Bzzzt!!! Wrong answer! Go play politics somewhere else, Beltway Boy!
So what company is poised to take Apple’s dominant growth position?
Absolute zero.
In other words, only a split would get it down to 400.
There is really quite a lot of bearish “sentiment” around Apple. And by “sentiment” I mean ideas divorced from any quantitative reality. But it makes me dream of $400. Because, frankly, I had to liquidate on the way up and I’d love to get back in under $500.
Sooner or later Tim Cook is going to admit what we all know… Apple is a disciplined money printing machine. All the investments they want to pursue barely make a dent in the fire hose of new cash. They’ll never need their pile of cash. Not a dime of it.
All of the shorts are ignoring all that cash hanging over their head. A shock and awe buyback announcement — perhaps just an annoucement — could create the largest short squeeze in history!
But talking my own book: please be short and go shorter. Sell me stock you don’t own at under $500/share. Pretty please. You’ve got momentum on your side how can you lose?
I’ve asked this before and never received a serious answer, but am still curious so will ask again.
If Apple was to drop say 10 or 20 billion dollars to buy back shares, is that something they can legally do anytime or do they have to do it over a set amount of time, pre-announce it etc ?
I’d love to see what happens to the price of the stock and all the people shorting the stock if Apple did something like that in response to a big drop.
Glad Apple doesnt have incompetent assdumb fkups like that Kenyan assfool running it. It would be on the road to bankruptcy.
Do you mean Emilio Mwai Kibaki or the person you look at in the mirror when you brush your tooth?
Well played!
Ooo! Wheee! He read a book! “The Black Swan” – one trendy best seller and this guy thinks he’s an expert. If he really read the book he would know that what it says is that people like him are idiots!
Mere FUD. Nothing new to Apple.
Did you know that Apple has so much money that they could give every person on this planet a million dollars and still be the World’s largest tech company?
Check your math. I think you’ve got either too many zeros or too few somewhere. There are six billion people on the planet. that’s a six followed by NINE zeroes. Giving each a million would add six more zeros to that figure, or six quadrillion dollars. Or roughly six times the net worth of the entire planet (by one rough estimate I found on Yahoo).
Apple is good. But they ain’t that good.
Calm down fanboy. Why don’t you start by giving me the first $1,000,000.00. Jeez!
Descending to click bait? What even bother posting this useless c*ap? Also, are you unaware that the HFT machines harvest headlines? By reposting BS inflammatory articles such as this you actually help drive the price down.
Just go private. Apple is clearly releasing all these rumors so that the price can drop and stock buyback can occur at an even cheaper cost.
My thought is this. We hear about all these things that Apple is supposedly working on. Yet we all know that there’s no chance they would release a cheaper iPhone or a phone without a keyboard. And we have all heard about the fake products Apple will make you work on until they know you can be trusted to not leak information about them. Perhaps the rumors that we hear are just from those who cannot be trusted and don’t make it past the first phase of screening.
It is a plausible scenario given Apple’s commitment to secrecy.
If Apple were to go private, it would exhaust all its nest egg, plus to borrow from Wall Street’s banks to finance the purchase.
Split.
No, it’s not a wise move. It would just create more papers for Wall Street to create more havoc in order to spite Apple. What Apple should do is to consolidate its shares. Now it has 940 million shares on the market. Half it to 1 for 2 to make the price double. If Wall Street still wants to play down Apple shares, let’s see how far it would drive down the price. If it keep on with its madness of vindictiveness against Apple, then it’s an opportunity for Apple to buy back its shares at a cheaper rate without breaking the bank than if it tries to take the company private. This will benefit long-term investors because the shares would be scarce and Wall Street would not be able to freely manipulate the shares as it does now.
Apple can do this because it does not need any more funds from Wall Street for expansion. Companies that are short of funds to expand have to rely on Wall Street for finance and consequently they are at the mercy of Wall Street. Wall Street would love for companies to issue more papers into the market because it can easily manipulate and dictate what these companies could do or not to do.
After Apple has mopped all shares from Wall Street’s deathly embrace, it can slowly increase back the number of shares in the market by issuing bonus shares to existing shareholders in the form of 1 for every 10 or 100 shares. Never again let Wall Street to control its destiny. I do not know if there is any other companies that have the cash hoard of Apple to pull off this audacious move.
Who exactly is this ‘intellectually challenged’ nobody? What a convoluted diatribe of meaningless gobblygook! My sympathy to his immediate relatives, unfortunately you’ll need to keep those paper bags on your heads awhile longer…..
What an idiotic TechTard:
In short, I do understand the bear case for Apple
No you don’t. There is no sane bear case for Apple. There is only ignorance and stock manipulation.
This Apple Bear BS has to be the most hilarious illustration of TechTardiness in the stock market I have EVER witnessed. Technology is now well beyond the comprehension of Wall Street. Everything they state these days about about tech comes out as baby talk versions of techno-babble. Anyone around here a baby talk translator?
Hey babies! GROW UP AND LEARN! 😆
Gosh, I’d say there’s a bit of a bear case this morning. Translation of parts orders cut in half is hardly necessary.
the news has been the same for all 2012 and that is that samsung will take over the market
everyone seems to think sammy has the better phone the reality is that is not true
Insanity.
I think we hear this every January. Production after the launch/holiday quarter slow, and people think the sky is falling.
In any case, the numbers being thrown around are pure fabrication.