“Apple shareholders have to be made of tough stuff. We’ve endured 4 discouraging months– Apple’s share price is right back to where it was on January 5. To add to the frustration, Apple delivered 2 strong quarters, soundly beating estimates and showing investors considerable growth in earnings and revenues,” Stephen Rosenman writes for SeekingAlpha. “Q2 revenue and EPS were up 83% and 91% respectively. Q1 revenue and EPS were up 71% and 75% respectively. The share price didn’t even beat money markets. Shareholders, I feel your pain. After all, I’m another suffering Appleholic.”
Rosenman writes, “There have been 3 miserable periods to own the stock in the last 3 years, and each lasted 4 to 5 months.”
“To me, this year’s weakness is reminiscent of these morose periods,” Rosenman writes. “Apple has been trading in the doldrums for a little over 4 months, shy of the 5 month sleep walk seen in the last two cycles. If history is any guide, Apple should start to reward long suffering shareholders. Apple’s agony has been experienced preceding shareholder ecstasy, and this time should be no different. Apple’s remarkable earnings should win investors over again.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
Yeah, because past performance is always a guide to future performance. Apple stockholder BTW
Actually I agree. Apples past wonderful performance is an indication of its future great performance. The stock price is being manipulated so its no indication of anything except greed and control.
Just a thought,
en
Right. Please explain exactly how the aapl stock price is manipulated over a 4, 6 or 8 month period.
ask JP Morgan and Goldman Sachs
I was wondering when someone was going to say something about this. Logic dictates that Apple’s share price should be going through the roof. As a certified conspiracy theorist, I gatta go with market manipulators. Bummer, huh?
Totally agree. But there is a bright side. Accept the manipulation and join the roller coster. Buy low, sell high. But keep some stock as a long term hold.
Just a thought,
en
I’d just like to know why Apple had to be the choice of the manipulators and why isn’t there anything being done about it. Good companies should be rewarded along with shareholders. If such blatant control is happening then something like that should be considered illegal. I know that the oil speculators are able to get away with driving up prices and that’s even more dangerous to the economy than Apple. New controls need to be set in place to curtail such obvious manipulation.
I agree, I invested in Apple and the manipulators should be hung by their apples…
Why? Did it ever crossed your mind that Wall Street has to do with honesty and legal procedures? Well, reality check! You and I both know Wall Street is THE biggest mafia on the planet. Hell, even THEY admit it openly 0_0! Of course the control things Illegal. As far as the controls you mention, THEY SET THEM ANYWAY! So sit back enjoy the puppet show…
Apple is NOT being manipulated. Plot AAPL against major tech stocks and you’ll see that the tech has been hit much worse than AAPL this year. With the volatility of oil and instability in the Arab world, tech has always been the first sector of choice to unload, as many institutional investors still consider it higher risk than other, decades (and centuries) old industries.
And what idiot can possibly say “long suffering” for AAPL, of all stocks????? AAPL is, at present, higher than it has ever been until this year. In other words, their “long” suffering hasn’t even been six months long. In terms of investing, that is an extremely short period of time. Ask MSFT share holders about “long suffering”; they will have a story to tell you about it.
Or Intel. Been stuck at 20 dollars for as long as I can remember.
Predrag, you are correct. Donkey story, donkey writer. “long suffering” for 4 months, sheesh, if you’re 14.
The problem right now is that institutions are holding 73% of aapl shares and they tend to be much more conservative investors. That’s precisely why this has been the first down trend for AAPL now 4 months running. But…… the guy is a little too overly dramatic!
My own personal opinion is that AAPL shares have had at least one quarter of downturn a year. Normally that’s the first annual quarter of the year. China sales came through stronger than expected and that’s a relief, because truth be told, Verizon for all the hype didn’t make that much difference w/ a 6mo old same model w/o 4G.
It’s a good thing they had that amazing quarter, because this one is going to be shorter than they’ve seen for awhile. Reason? Still no new phone model and iPhone4 is competing against a blitz of dual core smartphones with a army of extra features out right now. The Tsunami and this explosion will hurt this quarter and make their 4th fiscal quarter a must have win.
The problem is they have nothing to fill the gap with but a white iPhone4 and that’s not good. The A5 ramp up at Samsung Austin Foundries isn’t going to be enough to supply iPad, iPhone and iPod w/ chips. So they are making a move to TSMC and this is a very risky move. Samsung uses proprietary processes and techniques. The move requires a die shrink on top of that from 45nm to half node proprietary 40nm process of TSMC Foundries.
So A5 had to go back to Intrinsity Design to compensate for all this. The new A5 hasn’t even ran a test chip yet at TSMC. There is as yet no sign of retooling production lines and this absolutely must begin in June or we can expect a delay into November for iPhone5 release. There’d still be an optimization package required after test chips and then if…. things look good, ramping up production lines and hoping you got it right.
So the next 6 months will be the tale of the tape for the year for both Apple and investors. But Apple does have some new tricks up it’s sleeves, so we’ll just have to see what they’ve got in store through summer!!!
The difference between now and the previous two periods of dead money in the last 3 years is that earnings and sales were good, but not ridiculously good as the last 2 quarters have been. I doubt Apple has ever shown stronger fundamentals than right now.
I think everyone complaining about manipulators need to look at the broader market and consider world events. It’s easier to cry manipulation than look at those factors I guess.
The market is likely undergoing a correction at the moment. Unless you are a short term or day trader, none of this should matter to you anyway. Good long term investors buy in on dips like this. The company is fundamentally about as strong as any company can get. It will continue to rise long term.
I bought the stock for $14/share 10 years ago. It’s been performing just fine as far as I’m concerned (no interest to sell it anytime soon, either).
Wall Street plays a game that isn’t a whole lot different from the 3CM dealers on the streets. They are better educated, better connected, better dressed & better paid. They are masters of the heads I win- tails you lose gambit.
Apple is a solid company with a bright future & was long before Wall Street took notice. I buy whenthe price is down and have watched it steadily rise- long term. I’m not interested in stock flipping.
@ Macromancer and Predrag
Apple stock is being manipulated. Jim Cramer even admitted it and showed how it is done.
Why does aapl get manipulated so much? 1. Because it is financially a good bet – it is rock solid so the fundamentals minimize the risk. 2. Apple are very secretive about their product plans – this helps create hype and supports disinformation. The market uses this to bring the stock down. 3. Apple has potential growth prospects – the market can leverage this when they want to move the stock up.
I totally agree with the author of the article. The stock will go up and we have to wait out the doldrums. I’ve been through all of these and more and have increased the value of aapl stock 5 times. I bought in at an average of ~70 and saw the stock rise up to 200 before going almost back down to 70 again.
Sickening thing was that I started buying aapl stock when it was around 15 (split adjusted) only to sell trying to catch the ups and downs. I failed miserably because there is no way to guess whether the market will reactive favorably to earnings release.
In one of those times the market finally realized that Apple were on to a good thing with the iPod. I had just sold my stock and missed out on at least a doubling of the value. That was around 2004. After that the stock went from 17 to 84 in less than 2 years.
After that I bought in for good and am happy with the growth I’ve seen. It will go up again soon since, just like in 2004 with the iPod, the body of evidence that the iPad is highly successful will propel aapl to new heights.
Must be a slow day in the newsroom today. What a dramatic story to an otherwise run-of-the-mill life of a stock trading in a market. It sounds awfully like Apple itself is to blame for its stock performance. Did you ever consider that the primary reason for this lull in AAPL is because of the overall market conditions?! Be patient and think like Warren Buffett. AAPL has strong fundamentals and will grow in the long-term. As for you day-traders, pick another stock other than AAPL!
Must be a slow day in the newsroom today. What a dramatic story to an otherwise run-of-the-mill life of a stock trading in a market. It sounds awfully like Apple itself is to blame for its stock performance. Did you ever consider that the primary reason for this lull in AAPL is because of the overall market conditions?! Be patient and think like Warren Buffett. AAPL has strong fundamentals and will grow in the long-term. As for you day-traders, pick another stock other than AAPL!
Wishing for something doesn’t make it true. This stock is NOT going back up, and neither is the rest of the stock market. The economy is about to enter a major depression (we haven’t even begun to see bad economic times yet), and ALL stocks — including Apple — are going to tank along with the rest of the economy. If you own AAPL, now is a good time to sell to lock in your profits. You can always reinvest again later.
The price of gas is certainly taking a bite out of the middle class. No doubt there is going to be a down turn…. Probably a big one.
The price of gas from 80 or 90 years ago was about a quarter a gallon. Inflated over time into current dollars, it’d be over $3 a gallon. The current price is not that far from that historical range. We’ve been spoiled with cheap gas.
The average car uses about 600 gallons a year. If the price of gas goes up $1, that’s $600. That’s a “bite” but not a huge “bite” for the “middle class”. Just cut out one family trip to your Starbucks or BK a week, and you’ve saved more than that $600 in a year. It’s NOT that hard to save $600 in other areas.
The price of gas for your car is one thing. But transportation and energy costs go up for food and everything else. That cost is passed on to the consumer leaving less disposable income. Have you paid to ship anything lately? Don’t kid yourself, the cost of energy is taking a bite.
Good point. i just had to ship an overnight letter via FedEx from Los Angeles to Chicago, and I was absolutely shocked at the price. It was almost $30.
You need to get out of your bomb shelter more often.
Even if the US economy were to drop back into a “major depression”, Apple sells more product internationally than domestically. In a “major depression”, exchange rates and foreign tax rates all work to Apple’s advantage. The stock might take a hit due to macroeconomic effects, but Apple’s underlying profitability should remain very strong relative to other companies. Ultimately, those strong fundamentals will prevail.
after options are manipulated to expire at $340, investors are going to heavy up on puts thinking that the next month’s options expiration will be dragged down to $355 – however this is the month where the manipulators will flip it and reverse it and decimate the shorts with heavy call buying later in the month moving AAPL to $380 by the end of June.
This pattern has played out for the last several years, always making the shorts guess wrong, thinking the june expiration will follow may, but it always jumps.
Truth? Institutions have a Bear hold on AAPL shares and that’s a dead horse dragging down a Jet Boat trying to get it out of the water for more action. No doubt without a new iPhone5 in June, we will see lower sales reported over Apple’s 3rd and 4th fiscal quarters. Unless by some miracle they get A5 coming off production lines enough to an expected 20+ million a quarter sales expectations for iPhone5 in late September to October!!!
This is the main difference between now and years gone by. A delay in product release!!!
I meant to say $370 by the end of june… more coffeeeeee please
Gee, Apple stock goes higher in about a month, when historically the new version of the iPhone is released, people line up around the world to get one, and Apple is in all the headlines. Imagine that . . . .
Apple’s stock isn’t getting manipulated…much. Sure, jerk-offs like Jim Cramer will bring it up or down a few points here or there, but that’s going to happen anyway from rumors and speculation.
Apple’s stock is now high enough for Apple to suffer from large numbers.
You can combine the large number effect, with their enormous pile of cash on hand that has an extraordinarily low return, and the fact that Apple doesn’t pay dividends, and you’ll see that there’s obvious reasons for downward pressure on the P/E ratio.
I’m not suggesting necessarily that Apple should start paying dividends, but remember, for every dollar invested in Apple, 20 cents is put on the shelf where it will yield a crappy return. And the low yielding cash on hand is growing at a very rapid pace.
Back to the large numbers…
Apple has a P/E of about 15.85. And that’s a trailing 12 month P/E. Apple is growing so fast that a TTM P/E ratio is incredibly misleading for investors. So what you have are investors who looking at forward earnings and invest in start ups, and those that invest in solid performing companies with strong earnings. Apple has a lower than average P/E ratio, even as measured based on past earnings, but the market cap is so high, and there are other unknown variables that investors looking for solid stocks are nervous about it…see Warren Buffet and why he won’t touch Apple (it’s not because he doesn’t believe Apple won’t continue to achieve enormous success).
For guidance on AAPL, take a look at comparable stocks. There aren’t many, if any. The closest would be XOM, Exxon Mobil. XOM’s P/E ratio (TTM) is 11.43.
XOM has a lot fewer unknown variables, and pays dividends. It has a much longer history of solid performance, and we don’t exactly see many threats from the competition in the immediate future. Yet, the stock is perceived as a less likely return than AAPL.
Apple has a long way down to go in terms of P/E and large number downward pressure on the stock.
Sure, the stock will grow as earnings continue to grow even stronger, but the thought that Apple isn’t being priced fairly will be a feeling that grows much worse along with it.
Oh, and don’t forget that Apple is a seasonal stock. It’s just about to come out of its down season now. This may have been forgotten due to product announcements and market conditions that have disrupted the cycle, but the seasonal pressure was always still there.
Apple have clearly state that they are using their cash to secure long term supply deals.
Why is that important. Look at the huge demand for the iPhone and iPad. If apple hadn’t secures component inventory then they would have even more backlog.
The return on investment that apple gets from this is huge. They don’t quantify it for the investors but it basically provides half of the revenue and profit that apple get a quarter.
Problem is that the market is too dumb or conniving to understand this. Apple is making huge profits became they can shift large numbers of high quality products. No one else does this and the market is too narrow minded to acknowledge the impact it has.
@DogGonetoo,
“Apple have clearly state that they are using their cash to secure long term supply deals.”
Apple has stated that they are using a *fraction* of their cash for this. The cash used for this is less than the yearly growth of cash. Meanwhile the rest of the cash is returning extremely low yield.
“Why is that important.”
I understand the importance, and so do most investors, but again, we’re not talking about all the cash. If we were, that in of itself would be a problem as it would shift from non-performance on cash, to cost of revenue. If Apple needs 65 Billion dollars to operate, then the opportunity cost of that cash needs to be deducted from earnings in determining how to value the stock.
In other words, it doesn’t matter what Apple does with the cash, if it doesn’t earn a direct return, it will weigh down the price of the stock compared to what it otherwise would be if it had the cash and was getting a direct return on it.
“Look at the huge demand for the iPhone and iPad. If apple hadn’t secures component inventory then they would have even more backlog.”
Right, except 1) that doesn’t account for the vast majority of the cash on hand and 2) you then need to look at the opportunity cost of the cash in determining the success of the iPhone and iPad.
Think of it this way…
You open up a lemonade stand on the sidewalk. You get $20 from your mom and buy cups, lemons, sugar, ice, etc… and at the end of the week you make $40 in sales. This gives you a $20 profit. Great.
Now, same situation, but suppose the city requires you to post a refundable bond of $100,000 in order to be a street vendor where you live. You’d still have $20 in expenses, and $40 in sales, but was it worth posting that $100,000? Maybe, if you have wealthy parents, but ideally, you’d rather have the lemonade business where the bond wasn’t needed, and if you had the 100K, you’d want that invested somewhere making more than $20 for the week.
That’s an exaggerated example, and it’s not to say that Apple shouldn’t be using its cash for supply contracts, but again, this isn’t how the majority of its cash is being used, and even if it was, while it may be the right thing to do, do expect it to place downward pressure on the stock price.
Apple’s stock is being totally manipulated, because on sheer fundamentals, the valuation is way too low given the actual EPS numbers. Watch AAPL land right on $340 on the nose and the majority of calls and puts expire worthless and all the money goes to the house. duh.
Apple is apparently unaware or unsympathetic to the fact that their stock is tanking. Regular investors are being fleeced by Options Players and Short Sellers. Apple Management refuses to pay a dividend or do a buy back. They want to sit on all the cash. Okay!! But there is no reason they can’t split the stock. The ability to manipulate the stock is based on the high price per share. Split it 10 for 1 and those crooks will have to find a new Yo-Yo!. That would allow broader Stock ownership as well. STEVE – – Please – Do something now! Wouldn’t it be fun to watch all the naked short sellers have to hit the panic button!
I bought around 30000 of apple two years ago and it is now 89,000.
I am now going to buy 25,000 this week. I really think there is no end in sight. I work in computers and even our records departments are going to apple. I just got an apple for my workstation. They only have a small fraction of the pc market so you have monster growth in the future. My kids wont touch a pc so there is also a monster market of future users growing up right now that will never work on a pc. Education is now looking hard at ipads in schools to replace textbooks. Of course the textbook companies are going to fight hard but the ipad may be in every school in the us in the next decade. Of course the sad event of Steve Jobs passing will have an effect but Tim Cook is an excellent CEO and will direct the company in the right direction. I think the stock may be in the 4,000 range by the end of the decade then I will be able to sit on a beach and relax!!!