Why Apple’s share price has stalled and why it could soon go higher

Philip Elmer-DeWitt reports for Fortune, “In a note to clients issued Wednesday morning, Piper Jaffray’s Gene Munster takes a crack at the question Apple (AAPL) investors have been asking since January: Why, despite one record quarter after another, is the stock going nowhere?”

In the full article, Munster offers three reasons that will be familiar to those who closely follow AAPL.

P.E.D. reports, “Munster also offers three reasons he believes the stock will soon go higher: [1] Even if the multiple does not increase or goes down, we believe the stock will move higher based on positive earnings revisions; [2] Apple’s entrance into a new product category, possibly televisions; [3] Apple to announce software features for iPhones, iPads and Macs at WWDC on 6/6 that could serve as a near-term catalyst.”

Read more in the full article here.

MacDailyNews Take: Apple, please put out a TV already, so Gene can move on to obsessing about something else (and we can go line up to buy them).


    1. Actually Steve’s last medical leave didn’t stop the stock going to $200 for the first time. More likely this is a not-unusual correction, considering the stock is still more than four times what it was a little over two years ago.

      1. That was last time. This is this time. I agree with “Praying for Jobs”. If something should happen to SJ, the stock loses 33% in the batting of an eye. What happens then is anyone’s guess.

        Okay, okay, 83% of percentages are made up on the spot, but still, the SJ uncertainty is nothing but a downward pressure.

        Recent dearth of exciting products and services is also a weight. Just look at the 10 point jump that came on rumors of Apple Stores doing something interesting. Investors are looking for something whiz-bang.

        I have a feeling that desire will be soon met.

        1. “Recent dearth of exciting products and services is also a weight.”


          Do you remember the iPad? The product that completely changed the computing paradigm, has competitors falling all over themselves scrambling to catch up, that has received the most buzz of any product maybe since the original Mac, and has added billions to Apple’s bottom line in a category that didn’t even exist….

          It’s BARELY BEEN A YEAR since they launched the iPad, and you are saying a ‘dearth of exciting products’.????

          There’s just no other way to put it… you’re an idiot.

    2. No, that’s that’s a minor consideration. Short-term hedge traders love to play this stock, and always try to work even the slightest negative into a shorting opportunity. They will also be riding it up later. Helping the hedgies are Apple’s hateful enemies who spend tons on advertising, PR, and “market research” to create the appearance of overtaking the iPhone/iPad. But the financial numbers and Apple’s fountain of brilliance prevails eventually.

  1. If the analysts as well the market still feel that Apple needs to add more products to their lineup in order to move the share ticker up, they might as well start shorting the stock now.

    Apple doesn’t need to shift their focus from the busy products they already have on their platter, and the products are not collecting dusts. Apple now has a stable platform in iOS, they are about to dive into the cloud, shifting their focus into something like entering “into a new product category, possibly televisions” that doesn’t lend itself easily into the iOS model (touch screen), should be the last thing on their mind.

    1. I believe Munster is just trying to cover up his poor advice of telling investors to buy Apple. He keeps coming up with lame excuses as to why the stock hasn’t moved for seven months but tries to assure it will eventually rise. Frankly, he’s probably embarrassed for not telling his clients to buy Netflix seven months ago.

      All the analysts should be apologizing to their clients for recommending Apple as a growth investment. If all Apple investors had left their money in their checking accounts for the last seven months they would have made more money. I’m willing to bet that those Microsoft dividends they could have had must be looking pretty sweet to Apple investors by now.

      Of course individual investors would be scared to pay $340 for a share, hold on to it for seven months and end up with $330. Especially when the company is printing money by the truckloads. Does that make any sense at all to an average investor? I think it makes no sense at all.

      Oh, right, I keep forgetting. It’s the NEXT quarter that Apple stock is massively going up. As long as you believe strongly enough, it must surely happen.

  2. I know of 3 people who, when I suggest they take a look at buying AAPL, say the stock is too expensive. $330-plus scares them to death, but $33 is fine. While most of us know that $330/share is the same thing as $33/10shares, it just FEELS expensive to the casual investor. I think if they did a 10-to-1 split that there would be many more buyers than there are now.

    1. Yes, it’s time for a 10 to 1 split for the rest of the people. It will benefit the current AAPL owners first 🙂 then AAPL will go Up way faster than now.
      Record after record profits every quarter is not enough. Apple management must learn to play the stock game that the institution holders do each day. Buy now regular people and Hold. The more we own AAPL the less the other Big boys can have and manipulate AAPL!!!!!!!!!!!
      Product lines are in place… need more factories for the demand worldwide 🙂

      1. A dividend would help. A number of institutions have a requirement that stocks they own pay dividends. I met with a dividend focused fund manager yesterday. his focus is cash flow and sustainable dividend. Apple could pay a 2% dividend with only 40% of its cash flow.

    2. You don’t need more cheap buyers who are prone to manipulate. What Apple is doing is honest work, what’s happening to the stock is dishonest manipulation that won’t/can’t continue forever. Look at that Berkshire stock, they don’t do splits, and are not for everyone. Apple just needs a steady hand at the top, execute on their decade long plans to the T; and patiently await for the competition to walk into the eventual blunders they have sown/are sowing as we speak. All I see, from Amazon to Samsung, are puck chasers. Apple is probably already playing a different ball game, where slam dunking is more apt.

      1. The cheap buyers you speak of are anything but stock manipulators. If they could do anything they would “manipulate” it to the upside. And so what if many of these cheap buyers buy & sell on a whim? It can’t be any worse than the institutional brokers buying & selling with the intention of driving it upwards on some days AND downwards on others, depending on the options they hold.

        1. ER, read it again… its “You don’t need more cheap buyers who are prone to manipulate.” Which is totally accurate.

          Actually, I wish I had more cash, I would buy low and sell high and ride the changes like the big manipulators.

          The SEC does not really care about doing their job or they would already be on people for this.

          Just a thought,

    3. If they don’t understand the ‘cost’ of buying a stock I would offer two thoughts:

      1. They probably wouldn’t be buying that many shares anyway.

      2. If that’s their level of understanding of how stock works, they shouldn’t be investing in the first place.

  3. According to Zaky Apple’s stock stall is more to institutions considering that Apple is a large cap stock and are treating it like one.

    This despite the huge growth for several years, new breakout products such as the iPad, success in both PC and mobile markets to name a few. They seem to think that Apple cannot continue like this in the next year.
    This makes no sense to me given the huge demand for
    Apple’s products on multiple fronts. It convinces me that the market movers have extremely poor understanding of Apple’s business and do not have the capacity to think outside the box.
    I also feel that they are looking greedily at Apple’s cash and are trying to force Apple to post dividends like most large cap companies. They effectively want Apple to hand over that cash to them. For the average investor that does not help much. $3B spent on dividends will provide ~$3 per share or roughly 1% of the share price. Hardly a great return and the money would be better spent by Apple directly.

  4. it won’t be a TV. It will be an iTV = apple display + apple tv 2 + hdmi in. Upgrade apple tv 2 to run iOS apps, add 40″ or so models and voila! All existing stuff. Just need some integration and packaging. Apple already sells the best looking displays on the market. Apple tv 2, at $99 retail prrobably only adds about $50 or so to the price of the display. The software is essentially no added cost. The only question is, will they sell?

    1. Yes, this happened a few weeks ago. Could be contributing to the lag, but It’s probably overall market weakness.

      The article on Seeking Alpha is a good read if you’ve got time and are interested in these sorts of things.


      OTOH if Apple was added to the DJIA, that would have the opposite effect of the NASDAQ issue as AAPL would have to be bought to fill DJ related funds etc….

  5. damn… how about just the fact that the smartphone market and tablet markets are still seeing big year over year growth and apple is just getting started?

    you ain’t seen nothin’ from apple yet! just wait.

    1. Agree and it is all about uncertainties and misunderstandings associated with Apple …..

      Fairly soon we should get some numbers on the desktop and laptop sales and there will be a major jump in sales and the street will finally realize Apple has a ton of growth in PC field …… and …… the growth will be stunning and very real and the street will look at Apple as more than a one or two trick pony they see today ……

      Not to mention the new Lion and IOS coming will only fuel the explosion in the PC sales …… Along with the APP store and the new MacBook Airs coming ….. Did I mention the iCloud and …..

      Yea, the street will finally put it all together …..

      Apple to $500 and beyond ……

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