“A couple of weeks ago, I applauded Apple (AAPL) for doing the right thing by using its buyback to cushion a fall in its shares after the latest earnings report. When Apple’s fiscal Q2 guidance did not impress, shares slid from $550 (and a high of $575) to under $495,” Bill Maurer writes for Seeking Alpha. “The news of Apple’s buyback inspired some confidence in the short-term, and shares quickly bounced back to $551. The rally didn’t last long, as a couple of analyst downgrades knocked down the stock, and Apple closed Tuesday at $522.”
“The fear about guidance was valid because current analyst estimates call for a small decline in Apple’s fiscal Q2 revenues over the prior year period. Investors have become concerned about Apple’s growth, and flat or declining revenues are a big issue,” Maurer writes. “The stock will have a hard time rallying and keeping a decent valuation without growth. In today’s market, names like Google (GOOG), Facebook (FB), and Tesla Motors (TSLA) keep rallying to new highs, because they have growth potential.”
“That’s why it is so important for Apple to deliver now. The company needs to come out with something new, and rather soon. Even if it is just a new iPad or larger screen iPhone, Apple cannot wait until September or October to start launching products. Yes, the China Mobile (CHL) deal will help, but it may not be enough,” Maurer writes. “Apple protected its stock when shares fell post-earnings by buying back $14 billion worth of stock. Now it is time for Apple to launch some new products and get the growth story back on track. Apple may need a launch in the next few months to meet current Q3 estimates. If not, Apple’s guidance will probably be weak again in April, and regardless of the Q2 numbers, the stock will drop again. If Apple can launch some new versions of current products, and maybe some completely new products as well, growth will return. That should get the stock moving again…”
Much more in the full article here.
eh.
These people should shut up. Now.
Are you kidding?. They are paid very well to write about Apple, therefore, they are not going to stop any time soon, as long as Apple around.
This “style” of management, where your primary focus is the current quarter, “making/beating the numbers” and basically doing anything to pump up the stock price, has ruined more companies than it has benefited. It is ONLY good for….short-term investors.
I am so glad Apple doesn’t do this.
Captain obvious.
Heading for $500? Again?
But everybody else is green. Maybe it’s $400? Here come the shareholders with pitchforks and torches. Looks like they’ve had enough.
Every time Apple announced new products AAPL tanked. Last Quarter Apple beat estimates top and bottom numbers AAPL also tanked, further more AAPL tanks again today and yesterday. Damn if you do, damn if you don’t.
Over all Wall Street hates AAPL. 🙁
That is the best time to buy stock. New products from Apple are typically not received well until people play around with them and understand what they do and how they work. Think iPad. When first announced no one believed the battery performance, etc. Further, most people were like “eh its a big iPhone, whats the point”. Well big iPhone or not, it turned into HUGE sales after people got hands on it.
I feel the time to buy APPL is when the price is in the low $400 level. Not only will more people be able to buy but their chances of losing on their investment will be drastically reduced. It would also enable Apple to Buyback and retire more stock. Win win for all.
Bullshit
“In today’s market, names like Google (GOOG), Facebook (FB), and Tesla Motors (TSLA) keep rallying to new highs, because they have growth potential.”
Facebook doesn’t have growth potential. It isn’t even THE social platform of choice in many circles anymore. And Google? Evil Google? I’ll keep my money with Apple, thank you very much.
Old investing advice went something like: “Look to the companies that make the products teenagers are excited about.”
I asked my 14 year-old if she saw my post on Facebook and she responded, “Since I have their Messages app, I don’t really look at Facebook.” Instead, she uses a wide variety of services that keep her instantly in touch with her friends. It’s more like THE social platform is her iOS device (in her rather large circle of friends, one (1) has an Android device).
I also have a teenage daughter and she hasn’t used Facebook either, just the messaging app. Twitter and snapchat are her goto.
Out of interest I asked several of her friends and all said Facebook is boring. All of these girls are moving to Viber for their messaging.
I know that asking a group of 15 year old girls is hardly statistically valid, but they all said they dropped Facebook because their parents are there (Not me !).
TECH NEWS FROM THE 25th CENTURY…….
In tech news today the construction of the second colony on Saturn’s moon Titan remains ahead of schedule. In other news Apple stock take a beating and the company remains in serious trouble over its failure to release an iHolodeck Mini.
Because some memes will never die.
Seriously, STFU. When and if these bozos can run a billions dollar company that sets standards for technologies, they can just STFU.
Tim Cook will do nothing to help shareholders. This has been going on for years now yet no new products or acquisitions where investors can see profit and revenue growth. Jobs put in place a supply chain expert who has no vision and keeps talking about making the best products but not the most products. That just doesn’t cut it with investors.
Making the ‘most’ products would simply destroy the company, widening the cream part of the market as wide as you can is the answer where that line falls is the only real question.
@Peter – Apple’s priority lies with the end user, and thus the unmatched profitability and customer satisfaction. Investors looking for more than dividends should look elsewhere and not mess with the superior offerings from the most productive company of our time.
Good advice.. Also if anyone actually takes it to heart, be sure there are others that will at least buy those shares lest there be more supply than demand on shares and a lower price yet..
Agreed. Timber is as slow as molasses and a poor leader. “We have no shortage of new concepts”????? Then what about execution issues and ambivalence?
Here the author Bill Maurer responded to readers in Seeking Alpha:
Author’s reply » Patience doesn’t work when it comes to Apple. The company announced the largest tech revenue quarter in US history and the stock tanked. What does that tell you?.
The article was a bit long, but the back-and-forth of readers in the comment section was interesting.
I decided after reading all the comments (and the author’s replies) that Apple needs to end AAPL. Owners of “Apple” want great products that just work. Owners of “AAPL” want higher stock prices. The two, at least in the case of Apple Inc., are incompatible.
At the height of AAPL there were almost a billion “owners” — there have never been close to that many owners of Apple devices. And owners of AAPL are numerically more vocal about their expectations of the company than are owners of Apple products.
Every publicly-traded company sells stock, but only Apple makes Apple products. I hope Apple retires AAPL so this division and distraction can be eliminated.
What?!?!?!?!?!
“…end AAPL” = Take the company private.
Sorry, but you don’t know what you’re talking about. That’s impossible.
Unless you expect to believe that the average AAPL investor owned 1-2 shares of stock I highly doubt a number even remotely reaching a billion.. Looking at AAPL and using GOOG to compare, AAPL has about 2x the number of outstanding shares that are trading 5x more than GOOG.. Higher trade volume equals higher volatility.. I suspect some investors sell at product announcements thinking “this is the highest point. get out now” and just buy shares back a few days later when they think it has hit a bottom they’re comfortable with. Apple being secretive doesn’t really help things either investor relation wise.. Just causes anxiety for short to mid-term investors.. 😛
Agreed (and thank you for your polite and thoughtful addition to the discussion).
Steve said, “To focus means to say ‘No.'” To remain focused on products amidst all the headlines and Icahn tweets has to be tough.
With a bank balance at 1/4 market cap, and some rather well-off very close supporters, the board could move to return the company to a private venture, free from endless headlines of the “Apple misses again” variety.
My point was really that whatever and however Apple can reconfigure the conversation away from “Apple needs to do XYZ to increase shareholder value” to a more valid “Apple continues it’s push into ….” the better off the public’s perception of Apple will be.
Shut up, Bill.
What Apple needs to do has nothing to do with the rise & fall of its stock price. These analysts need to get a grip.
There is absolutely no point in pandering to Wall Street’s games, Tim Cook knows that.
Buying back shares does support AAPL to a certain extent, but the shares dropped again afterwards for no logical reason, meanwhile billions of dollars was spent on those shares. However I don’t believe that Apple was primarily concerned with propping up AAPL when they bought back shares. The advantage to Apple is that the cost of bowing money to buy back those shares is less than the dividends that would have been paid on those shares. Supporting AAPL is a beneficial side effect.
Apple always acts logically, Wall Street acts anything but logically. Therefore Apple will not be drawn into dancing to Wall Street’s tune, Apple could never win that game and could lose a great deal.
Who writes this garbage
Let’s launch some new products! Open the vault! Why didn’t we ever think of this before? Can we get them out by the end of March?
Deliver what? Pizza?
On the contrary: Apple needs to deliver when its new products are ready, and shareholders need to respond rationally to circumstances as they are, not as some analyst wishes them to be, in the interim.
a big problem of Apple stock doldrum’s as I’ve written is due to atrocious Apple PR.
Aapl’s P.E is 12, Goog’s is 33. Low PE is an indication of the poor perception of the company. If aapl had Goog’s P.E the stock would be over 1000 now.
Apple under T. Cook simply refuses to defend itself (and hardly does any promotion either).
When the hedge funds and their pal analysts (sometimes both in one person like Doug Kass) manipulates Apple stock with false rumours (“supply chain issues, dwindling demand, consumer surveys say apple has lost it’s innovation” etc) Apple does nothing. Kass over and over again on CNBC manipulates aapl, declaring some made up issue to push the stock down to support his shorts and then he buys in when aapl is down (he even sheepishly announces it on CNBC that he has made a mistake that the stock — once he’s bought more — is going to climb again and he plays the aapl like a yo yo. ). Apple does nothing. When an analyst tried that some years ago with RIM (Blackberry), the RIM CEO immediately contacted the Canadian Government and the U.S SEC and made several PR announcements disputing the analyst. Hate Rim all you want but I bet that put the fear of God into the analyst and his hedgie friends. One big fund which deals more in long term holdings (70% of Apple stock is held by funds) sold all it’s apple shares because according to the CEO “Apple does not defend it’s shares against manipulation”. (The recent buybacks might be seen as a move in aapl defence but compared to PR it’s expensive. PR is CHEAP).
Apple’s reputation has been dragged through the gutter but Apple stays mum. Apple said nothing when NYT B.S itself to a Pulitzer attacking apple. Apple did not even send a letter to the editor correcting obvious errors. Recently again NYT ran article saying Apple was failing as China Mobile did nothing for it’s recent financials (of course China Mobile stats weren’t in the last financials but again from what I know Apple didn’t correct the article). Said nothing when Mike Daisey went around CNBC, CNN, NPR etc. Some say Daisey was not important but he was so popular programs like NPR wanted to devote entire hour programs to him and Woz was on stage opening his shows… Today press sources criticizing apple labour are STILL using Mike Daisey ‘facts’ in their reports..
Multiply this a thousand times by all the other apple hate articles in the press, blogs etc. My local newspaper (like thousands around the world) prefaces every apple article with ‘failing tech company, lost innovation… ‘.
For several years the only Apple PR announcement was a missive on Apple’s stand on Gay rights, and recently now working on a religious freedom thing in Arizona… (somewhere in between there was a few announcements on NSA spying but that’s all I can remember… nothing as Forbes, Fortune, WSJ, NYT, CNBC etc etc hammered aapl to the ground with nonsense articles). Hey apple maybe you can dust off the PR guys sleeping the corner and ask them to spend 10% of their time defending Apple and Apple stock holders huh?!
Associated with PR there is Marketing. You can see the same ‘philosophy’ in marketing as well : don’t defend , don’t attack.
Win 8 is a turd and is out for years yet apple does not attack it saying OSX is better to gain more market share. For all it’s woes Microsoft still makes billions off windows (go look at its financial reports). All the main stream press and ( the sales guys at Best Buy, Walmart I’ve talked to think OSX is the same or worse than windows) because apple PR and marketing don’t market and educate..
they don’t even market iOS BIGGEST ADVANTAGE i.e that apple builds BOTH the software and hardware thus making a seamless whole. Most people in Asia etc think Samsung makes Android. Apple spent months delaying last years iMac because of ‘advanced glass’ bonding but when it came out didn’t market it at all (no mac ads for years) — nobody including the sales guys at best buy ,Walmart know the difference.
Apple didn’t market the 64 bit chip or the fingerprint sensor , the biggest phone advances last year (!!! ) and now the opportunity is gone as the new Samsung phone has fingerprint sensor. SO THE PRESS LABELS APPLE HAS LOST ITS INNOVATION AND SO THE STOCK TANKS.
(Apple marketing is so bad that even years after Thunderbolt launch my local Walmart super centre which carries Thunderbolt macs don’t have thunderbolt cables , the sales staff don’t know what Thunderbolt — major apple initiative — is and Walmart is one of the biggest apple resellers. Apple PR and Marketing does’t even bother to educate its biggest partners much less the press … )
Note: Jobs was a Master salesman and PR guy, Cook hired Browett to lead apple retail….
Samsung hires astro turfers (as exposed in the HTC lawsuit), gives prizes to bloggers who write positively about it, spends FOUR times apple in marketing (media companies tend not to criticize big customers), Google spends 9 times apple in lobbying and hires full time evangelists to travel the globe to promote itself and bash apple.. (Guy Kawasaki long time apple icon joined Google as an evangelist. )
Yeah I know apple still sells a lot but thats because of good products, it can sell more with good marketing, and no one can deny the stock is in the pits.
(PR it’s CHEAP. just hire a few dudes to send out press releases and update the apple info website etc ). Apple needs to up it’s promoting game otherwise top management will have to waste time with Icahns of the world and spend billions on buybacks.
A lesson: a company which loves R&D and innovation, a playground for back room boys but doesn’t market is… Xerox Parc (laser printing, ethernet, GUI, mouse) in the 60s…. then Jobs “lets build, advance it and market the shit out of this… ” ( months delay and millions to make a fractions of an inch thinner iMac screen is great but don’t just let it be a past time for apple engineers… SHIP and SELL).
And final word on PR: We all know Good Politicians who Lost Elections due to Poor PR and Bad Politicians who Won Elections due to Great PR….
(the reason I keep harping on this PR and marketing issue that as an ex Advertising guy I hope more people would talk about it –and I’m so wordy as I don’t want to be misunderstood — and it gets back to some person in apple who will push it upstairs).
Apple needs to come out with new products WHEN THEY ARE READY, and not to push something out to meet some quarterly deadline.
A lot of formally successful companies have lost status as quality producers and long term profits because they were trying to please used car sales people like Bill Maurer who keep saying “NOW it is time for (insert name of company) to launch some new products”
As if Apple is sitting on finished products trying to figure out when Maurer thinks they should launch.