“Tech investors are a discerning bunch these days — a harsh reality that is pressuring Apple Inc. more than it deserves,” Steven Russolillo writes for The Wall Street Journal.
“Shares have slid 6% this year and 21% over the past 12 months. While some of that is justified as iPhone sales have slowed, the selloff also looks overdone heading into Tuesday’s earnings report,” Russolillo writes. “Apple at least has a low bar to hurdle. Analysts polled by FactSet estimate fiscal third-quarter earnings of $1.40 a share, down 24% from the same period a year ago. That estimate has fallen from $2.01 in November. Revenue for the period ending in June is expected to have dropped 15% to $42.1 billion.”
“Apple has been punished more than enough. The iPhone slump appears priced in,” Russolillo writes. “Apple remains wildly profitable, too. Its $10.52 billion profit in the March quarter easily surpassed combined profits of Alphabet Inc., Amazon.com Inc. and Facebook Inc. And its valuation is compelling. Shares fetch 11 times projected earnings, a 34% discount to the S&P 500. By that measure, the stock is the cheapest it has been in at least the past 15 years.”
Read more in the full article here.
MacDailyNews Take: Time to gin up some profits! Let that buoy go!
AAPL is like a buoy. Quick, it’s back on the surface! You there, analyst, and you, too, swim down and tug on the chain! Drag it under… lower, lower… Good! Now, quick, everybody jump on, and we’ll take a ride back up to the top again! — MacDailyNews Take, January 9, 2012
At the most basic level, it’s extremely simple: Pump, then dump. Foment, then buy. Rinse, lather, repeat as the SEC sleeps.
You bet!
Hope springs eternal.
We’ve all heard the saying how too many cooks spoil the broth. Apparently, it only takes one Cook to destroy Apple’s value. Apple have managed to be the only major tech stock to be in share price decline over the past year or so. All the other companies have figured out how to adjust to declining PC sales and a weak economy by moving on the other profitable businesses (mainly cloud services). Only Tim Cook hasn’t managed to keep his company out of the toilet. There’s just an endless stream of articles explaining how Apple is losing traction in all of its businesses. I’m not saying this out of malice but out of fact. Despite Apple’s profitability the company continues to remain one of the least attractive investments around.
Just don’t count on Apple’s share price rising upon earnings like all the other tech companies have risen. Apple always has to be the falling exception of the bunch. Why is that? I really don’t know. Fundamentally, the company has to be one of the strongest there is, however, shareholders only see a stock whose value continues to slide day after day. You’d think Apple is the only tech company on the planet being affected by declining product sales. I’m sure it isn’t, yet its falling share price keeps saying so.
mag7, I do not believe that Apple’s situation would be wildly different if SJ was still leading the company. He may have avoided a few pitfalls, but he might have fallen into others. He was a true visionary, but he was not perfect.
AAPL has been punished over the past year because of unreasonable YoY comp sales expectations and the long term fear of large numbers – people have long been looking for evidence that Apple’s growth rate is slowing. Any bad data will therefore have an inordinate effect on Apple relative to other tech giants – Microsoft, Google/Alphabet, etc.
Apple can and should do better. And its share price should be higher. I may even consider gradually pulling money out of AAPL and finding better investments. I love Apple and its products, but that is not a valid sole justification for an investment.
“AAPL is like a buoy. Quick, it’s back on the surface! You there, analyst, and you, too, swim down and tug on the chain! Drag it under… lower, lower… Good! Now, quick, everybody jump on, and we’ll take a ride back up to the top again! — MacDailyNews Take, January 9, 2012”
While analysts may be spending their time tugging on buoys, they may not have noticed that during this time Apple has been steadily draining the ocean.
They’ve already removed 17% of the AAPL stock off the market since 2013 and show no signs of stopping. One of the main things I’m interested in seeing is how much stock they’ve been able to repurchase over the past quarter, when the stock price has been especially deflated.