Apple Computer shares fall to lowest level in over two months on growth concerns

“Shares of Apple Computer Inc. fell to their lowest levels Monday in more than two months, on concern that there is not likely to be much good news surrounding the stock for some time,” Rex Crum reports for MarketWatch. Apple fell $4.15, or almost 6%, to $67.80, and the stock is down 22% since reaching a year-to-date high of $86.40 on Jan. 12. It’s the first time that the company’s shares have been below $70 since trading at $68.81 on Dec. 1.”

“For more than a year, Apple has put on one of the most-dominant market performances in the technology sector. The Mac and iPod maker even had a 2-for-1 stock split on Feb. 28, 2005 after its shares reached almost $90 — and then saw the stock nearly reach that all-time again in January,” Crum reports. “Robert Bacarella, manager of the Monetta Select Technology Fund said Apple’s overall business remains solid, but that there are genuine concerns about the company’s abilities to match is year-over-year profit and revenue figures… here is little to suggest it is necessary to sell Apple shares, but that the stock needs to show some strength at the $67 mark to maintain broad confidence.”

Crum reports, “Analysts surveyed by Thomson First Call estimate that Apple will earn 44 cents a share on $4.58 billion in revenue for its current, second fiscal quarter. Such figures would result in a 29% rise in earnings per share and a 41% increase in revenue. The huge success of the iPod, along with increased sales of Apple’s flagship Macintosh computer line have created a situation that, while enviable, is also hard to match with every subsequent business period, Bacarella said.”

Full article here.
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Apple Computer shares drop over 5-percent in NASDAQ trading – February 06, 2006

27 Comments

  1. You nailed it MDN. Just wait for the stock to create a new base beneath the 50 day moving average and buy in. But, as always, consult a professional when buying paper securites.

  2. I reckon the current movements are down to the big institutional investors cutting their exposure. They’re worried about falling Power Mac sales more than anything. Blame Adobe for that one. And this could go on for another couple of days yet, in which case the price will drop to $60 before sanity is restored.

    So what do we know about Apple that the analysts aren’t factoring in? We KNOW that iPod HiFi has been trademarked by Apple. We also THINK that Apple is going to release a home fusion product at a special media event, something using Front Row and coming with downloadable movies. If we’re right, those same institutions are going to be buying AAPL big time like they did when iTMS first came out, and the stock will go up to $85-$90 pretty quickly.

    So, do we think we’re right? Enough to put our cash on the line? Possible 50% easy profit? Anyone?

  3. When it comes to investment, (like they say in the property market) “diversity, diversity, diversity” that way you win on some and lose on others. Or to put it another way, don’t expect everything to give stellar performances. Me I like funds. Maybe they are boring, but given a good day I get my 10-12% apr. Better than a bank, maybe not as good as property, but then even property has it’s ups and downs. The real truth is that even the ‘experts’ get it right about 50% of the time and even less. The stock market is notoriously fickle. But look at 25/50 year trends and it has always been upwards. However, we are I think, entering difficult waters and maybe the bets are off just about everything.
    Just my 2 cents as they say…..

  4. Dave H,

    Shame on you for advocating speculation. ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

    I’ve said it before in another thread – If you believe in a company’s long-term prospects set aside a percentage of your monthly salary for buying its shares and buy whenever you get the cash, regardless of price. I think this strategy is referred to as “dollar-cost averaging”. Anything else is speculation.

    Retail investors should not play the Wall St. game – you’re cannon fodder for the big investment banks. Have a slow and steady investment strategy and always think long term.

    And if you’re wondering whether I’m experiencing a bit of “schadenfreude” at AAPL’s drop – I’m not because I have a good friend who’s heavily invested in it. I warned him never to fall in love with a stock – I hope he listened.

  5. iThink diversity in the stock market is foolish, Johnny Motel. Find a stock or two that you are intimate with and play ’em as good as you can. I already made my gamble to stay with Apple for another year, and I’m ok with it. If 84 was the top end then I missed it. But I still made a LOT more money going with one stock than some fund.

  6. “But I still made a LOT more money going with one stock than some fund.”

    That’s OK if you’re playing with extra cash to buy a boat or something. But if you’re investing for your kid’s college fund believe me – you’re better off with a mutual fund.

  7. Say what you like, but I’m still kicking myself for not getting into Apple shares early last year when they were down around $35.00… I really don’t see Apple shares ever going that low again, short of a major market recession.

    One thing I haven’t seen any analyzing take into account is the “holiday effect” that happens every single year with Apple share values. Whatever their relative position in the market place during any given year, it seems Apple’s shares will rise between summer and middle of January, then bottom out sometime in early or late Spring. Assuming my little perspective on history has any validity, I’m interested to see where Apple’s shares will be by early summer.

    Since Apple is doing better than ever before in it’s history there is going to be a lot of neurotic leaping to conclusions about whether or not its going to be able to “keep this up” over the long haul. But, let’s face it, Apple whipped up a lot of momentum last year based on solid sales growth and little or no playing with the numbers to make themselves appear to be doing well.

    I have no doubt that before summer the typical nay-sayers will be calculating the demise of Apple – but we should be used to that by now – We’ve been hearing about Apple not making it to the end of the year every year since 1984.

    This is the year I buy into Apple, its just a question of when.

  8. Nothing has changed – it’s mainly because there isn’t a daily or weekly results -or new product- announcement from Apple. Let time run it’s course…

    You do talk a lot of sense Evil_MS_User..

  9. G Spank,

    well put.

    Intimacy is the word.

    In my small way (I’m one of yer workers) I’ve made money – for the first time -because I know Apple and know, despite the unpredictable ups-and-downs of the market, where it’s going.

    I borrowed €10,000 from my bank a year ago, bought AAPL, and have doubled my money.
    I’ve just payed the bank back and reinvested –

    – in AAPL of course.

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