Adam Lashinsky: Apple shares look pretty cheap right now

“After a year like Apple had last year, it’d be silly to try to blow people away at Macworld. Perhaps it was better to lower expectations. I’m guessing that whether intentionally or not, that’s what Jobs did on Tuesday,” Adam Lashinsky blogs for Fortune.

MacDailyNews Note: Adam Lashinsky is a senior writer at Fortune, where he started as a contributing columnist in 1999. He covers finance and Silicon Valley for the magazine. He also is a featured commentator for “Marketplace,” the nationally broadcast radio business-news magazine, and a regular contributor to business-news programming on the Fox News Channel.

“The faithful’s disappointment had nothing on Wall Street’s, though. Apple’s shares have now fallen $19, or almost 11%, since Monday’s closing price. This will seem confusing to market watchers of the amateur variety as well as the pros. No one has answers, only guesses,” Lashinsky writes. “…Trying to understand the selloff almost isn’t worth the effort. Apple is one of those stocks that defies explanation.”

Lashinsky writes, “At $160 a share, Apple trades for about 31 times expected earnings for its year that ends in September. Analysts expect Apple to grow earnings this year about 31%, an astounding growth rate for a company this size. Next year they see 25% growth. In other words, at its current multiple, Apple is getting little or no premium to the market, despite the iPhone working out to be a bigger than expected seller and the Macintosh picking up speed. (Google , by the way, at $616, is off 18% from its high. It trades for about 30 times expected 2008 earnings and is expected to grow by 33% … I’m just saying … )”

“Apple reports earnings next week. It has a habit of underpromising and overdelivering. It isn’t the expensive stock it used to be,” Lashinsky writes.

Full article here.

20 Comments

  1. WTF. People are stupid. what were they expecting? but remember apple shared did this when the iphone was announced and then as soon as they were selling them there shares sky rocketed. So we need to wait until late Feb before the magic starts to happen but people really need to stop seeling. the people that hang on the more money they are going to make.

  2. In case nobody’s noticed, the market is getting freakin’ slammed! As great a company as Apple is, it doesn’t have one of those Star Trek cloaking devices to make it invisible to the investment community. When the market falls (or plummets), the vast majority of stocks follow.

    As a business-school grad friend of mine likes to say, “The problem is not idiosyncratic, it is systemic.”

  3. Mark’s right. The overall market is getting killed and guess what, that drags down even the best stocks with it.

    When we have a bad economy, people stop buying unnecessary items. Sadly, and as much as people don’t want to admit it, these items include new computers, iPods and iPhones.

  4. Apple will be announcing a new iPhone, that’s a fact.

    The problem is there is too much stock of the first version, they assumed it would sell like iPods.

    The next iPhone will be immensly better, but I think Apple is taking a wait and see, watching their primary US market headed for a recession.

    A great time to introduce a outlandishly expensive and under powered/featured product like the MacBook Air. People in masse won’t buy it for quite some time, but then again most people are thightening their wallets anyway so they were not much in a buying mood anyway.

    MacWorld didn’t WOW! because Steve Jobs knows economics.

    But he did do a cheap thing, the AppleTV and movie rentals.

    A perfect combination for folks to SAVE MONEY on their entertainment expenses.

    Stay home and watch your AppleTV.

    Steve’s no idiot.

  5. “A great time to introduce a outlandishly expensive and under powered/featured product like the MacBook Air. “

    shame that is a poor description. at best.

    i am curious, what is the comparable made by some other company? what are its features? what is it powered by?

    oh yeah, like the iPhone, NOTHING compares to it. good luck finding a baseline on that.

  6. Don’t fall for it. The stock might be forming the left side of a base but more likely it’s just falling. I’m not saying it won’t come back but now isn’t the time to buy. It’s too risky. It could go lower.

    It’s already crashed through the 50 Day Moving Average. Wait for a proper buy point. Apple is a great company and it has great fundamentals but that doesn’t mean it’s a good time to buy the stock.

    3 out of 4 growth stocks follow the trend of the overall market which right now is down.

    You can find out more about proper buy points by looking at the educational areas of the Investor’s Business Daily web site.

  7. “the stock is just falling”? No, it’s just that the so-called “analysts” don’t have a clue in the tech sector- not where Apple’s concerned. They didn’t understand iPod, they don’t appreciate the significance of the Apple TV announcements, and they sure can’t figure out the market for the Macbook Air… these morons are perpetually scratching their heads, and perpetually WRONG.

    The fact is that Apple is about to announce a blowout, record-setting Christmas quarter – iPod and Mac sales hitting on all cylinders. Remember when the commentards were puzzling over the fact that , at the previous conference call, Apple gave unusually aggressive guidance for the upcoming Christmas sales? That’s right- and you can bet the actual results will be even BETTER than their guidance. They always are.

    “Wait for a proper buy point” ? Trying to time the market is a fool’s (nay, retard’s) game. Why not deal with reality instead? You do know they are announcing quarterly results on Tuesday, don’t you? You are anticipating record results?

    Are you one of those bottom-feeding short-sellers? Like Jim Cramer?

  8. Oh, forgot to mention- since iPhone and AppleTV revenues are being reported on a subscription basis spread out over 24 months, APPLE IS NOT EVEN TAKING INTO ACCOUNT THE PROFITS BEING MADE THERE. That will be pure, delicious gravy over the next year and a half.

    The post-Macworld selloff only serves to weed out the knee-jerk bandwagon-jumping dumbasses who also don’t have a clue what Apple is about or where Apple is going.

    Skating to where that puck is GOING to be…. remember?

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