Howard Gold: Apple shares will never see $700 again

“Last September was a great time to be an Apple Inc. shareholder. The stock topped $700, capping a remarkable run in which the shares practically doubled since July 2011,” Howard Gold writes for MarketWatch. “It’s been downhill ever since. From its closing peak of $702.10, Apple shares plunged by 37.4% as of last Friday, when it closed at $439.88. The stock has bounced back a bit, but when the world’s most valuable company loses that much in just four months, something must be seriously wrong.”

“It is. Apple’s competitive position has seriously weakened, and investors are recalibrating their outlooks. Tailwinds have turned into headwinds as tangible and intangible issues alike weigh heavily on the shares,” Gold writes. “Apple has lost the mantle of the greatest growth stock of our era; it may no longer be a growth stock at all.”

Here are four reasons why I don’t think Apple’s stock will see $700 again:
1. Growth in phones is slowing as competition increases
2. Margins are shrinking
3. Apple is losing its innovative edge
4. Apple may no longer be a growth story

Gold writes, “CEO Cook may be quietly repositioning Apple as a solid blue-chip stock. That would be a big blow both to Apple’s image and to the cultists who worship the company. A dividend-paying Apple that buys back its stock like, say, IBM IBM +0.99% might be a fine long-term investment, but it wouldn’t be worth $700 a share.”

Read more in the full article here.

MacDailyNews Take: iCal’ed for future use.

57 Comments

    1. “…cultists who worship the company…” says it all. But OK, let’s take the idiot by the hand and lead him to reality. Let’s suppose Apple did, in fact, become another IBM. With a P/E of 14.7 AAPL goes to $700 per share, with an annual dividend of $17 per share. And you can buy it today for $450, but he says you’re a cultist if you do?!!!! What a fscking idiot!!!

    1. Sounds like an “anti-apple” cultist. Denying apple growth and success despite apple breaking record profit of any corporation on the planet. This is fact. Fact is not religion. Sorry.

    2. Don’t all companies wish they could have such strong followers? The strength of Apple is that they are so good that people give them deity status. People buy Apple products every time they are released. Is that a bad thing?

      1. Well said. Huge numbers of books are written and expensive seminars are given about how to build brand loyalty. Apple succeeds at this task and both Apple and its customers are attacked. Go figure.

  1. “Growth in phones is slowing as competition increases”
    As he talks through his ASS, Apple just took the number one position in all phone sales over Samdung. Apple is losing its competitive edge he says, as shit drools out of his mouth.
    Anal-ists are stupid and blind!

  2. “1. Growth in phones is slowing as competition increases”
    That is a non-sequitur. Growth in phones may be slowing, and competition may be increasing, but the two are causally unrelated. Statements like that destroy the credibility of the rest his propositions.

  3. I said the same thing weeks ago. Why didn’t MDN post a headline for my opinion? I believe MDN has iCaled these predictions because they intend to remind us all when they are proven wrong. Get over yourself, MDN. It is YOU who has been iCaled and you need to get ready to be reminded. If you ever intend to be relevant in your own cultist following of Steve Jobs, you need to start calling for someone who has ANY of his strength to be found and usher Tim Cook out the door.

      1. Jim I really appreciate your personal insight of Tim Cook. You actually give me hope. But he needs to show us something. Wall Street is waiting impatiently and every day that passes without some announcement reminiscent of WOW! then Mr. Gold will look like a genius.

        I am irrevocably convinced that the corporate and government markets were ready to adopt MacPro right when Apple just gave up and left that enormous, world-wide, endless billions and billions of dollars in sales and profits to the hated Microsoft. If Tim held a press conference surrounded by corporate moguls and federal agencies top brass and announced contracts to buy the new, unimaginable, power house MacPro that left every other box maker scratching their collective heads, then Mr. Gold would look like a fool. And, Tim could keep trying to catch up with the pop culture of plastic toys and I would quit complaining.

        1. PP: I am waiting to purchase some new Mac Pros. Desperately! But that will have little effect on the bottom line or the performance of Apple’s stock. Too few potential sales and not that much overall revenue generated. But you can bet that they will have very good margins on them. But new Mac Pros is not the answer for Apple’s woes. For the most part, Apple is hitting on all cylinders. With an occasional miss. It’s not that Apple is doing bad it’s that they have competition that they never had before. And that competition is doing more then eating into sales, it has generated a lot of negativity towards Apple products. Just as Apple has been able to eat Microsoft’s lunch the last few years. It certainly isn’t cool to own a PC anymore. Right? To some degree Android phones have done that to Apple phones. Trust me, that is especially true with people under 30. Even if they are inferior product. Some of the cool factor has gone away from the iPhone with this age group. That’s just a fact. If you are around a lot of these types it’s very easy to see. Perception. It’s that intangible thing that Apple had when it was taking down Microsoft. Now it is fighting the perception that it is not cool anymore. That’s the other edge to the sword. Like it or not it’s the elephant in the room. And the fact that there is no larger form factor iPhone doesn’t help that perception. That alone would bring some of the coolness factor back to the iPhone in the eyes of the younger buyers. And it doesn’t appear that Apple will do that anytime soon. So short of introducing a bigger iPhone or the Apple ITV anytime soon, I see the stock becoming a value stock not a growthstock. Not the worst thing in the world but not what Apple investors want to see happen. Seems that simple to me.

  4. Gold is absolutely right, folks . . . AS LONG AS over 70% of AAPL is held and controlled by a small group of institutional investors, and NOT a host of individual long-term, committed investors.

    I purchased 1400 shares of AAPL way-back when it was $42 a share. I believed in the company, AND I could afford that amount of commitment. The stock has since split twice . . . but its unit share has increased (now) ten fold. Few people I know can easily afford 100 shares of AAPL now, much less 1400. Individual investors like me are out of this equity today because I cannot afford any substantial block thereof.

    Until AAPL returns to more affordable per-unit shares and smaller, more committed investors return to the market for this equity, WHATEVER GOLD AND HIS ILK SAY GOES! I hate it, but it’s a fact.

    Here’s to a 10 for 1 split, Tim Cook. My entire family will buy 100 shares each as soon as you do!

    1. Words of wisdom. Unfortunately Tim Cook is as clueless about this very straightforward strategy as he is about what to do with the fact that the once amazing company has lost its moorings and is adrift without a compass.

      1. Success is never a straight path. Apple has had it’s jumps in growth but you seem to be an impatient opinionated about how quick they need to innovate. I believe this is unrealistic even from the colossal apple.

      2. This has nothing to do with Tim Cook. Amazon’s stock has performed very well and it’s run by Larry Page, also definitely not on the par of cult hero Steve Jobs.

        How’s Jeff Bezos doing it for you in the hero worship market.

        Look outside yourself that you will see that Apple has had a greast run of products, is a well run company, delivers value to their shareholders and cannot sustain the astronomical growth of the last year. No mature company can.

        What’s Apple stock worth? About as much as it shows on the top of this page.

        Stocks are not the Super Bowl. Stock prices reflect the performance of a company. This factors tangible and intangible forces acting in a market.

        Most of you are dumber than my freshman students.

    2. Per-share price as an indicator of anything is completely useless.

      There was a time (late 90’s) when everyone and their brother was opening Ameritrade accounts and buying stocks. This was during the dot-com boom. There were even commercials for these services in which ordinary people (nail salon workers, city bus drivers, toll booth collectors) discussed trading stocks. In many ways, this was actually true, and these types of investors were genuinely clueless about the market, buying stocks whose price per share was low, and steering clear of those where the price was high. That was also the time when companies were diligently splitting their stocks as soon as individual share price went into triple digits.

      Mercifully, those times are gone. Such clueless retail investors are extremely dangerous; much more so than the big hedge fund manipulators. The manipulators can often be predictable, but clueless ones are irrational and emotional, exacerbating any significant gyrations on the market.

      $60,000 buys you exactly $60,000 worth of AAPL shares. Whether it is 1400 shares at $40, or 140 at $400, or 70 shares at $800, it will be exactly as much money as you put in. If AAPL has growth potential, it will grow, whether share price is $2 or $2,000 (or $140,000, like BRK.A).

      Individual share price (as a benchmark for anything) is completely irrelevant.

    3. OK. Then please explain why Google shares are currently racing for $800 and yet Apple shares are too expensive at $450. How does that make any sense? Google is held by around the same percentage of intitutional shareholders as Apple.

      At some point, we’re going to have to stop making excuses why Apple stock has become toxic waste. Investors are certainly spending money, according to the Dow, but they’re just not spending it on Apple. It has become a very unattractive investment. Money goes in but nothing comes out. Why would anyone want in on a stock like that.

      Apple is being touted as a company without a future so what good is a company whose shares are one-tenth what they are now if the company is being declared dead. Pundits like Gold are just going out of their way to declare Apple a bad investment. It’s just too scary the way these people are trying to kill Apple’s investment value. It’s like people with picket signs standing outside of a store telling people not to buy from a store. How many people will be willing to take the chance of buying. I honestly can’t tell what Apple is worth because Wall Street’s values seemed to have changed drastically.

  5. This idiot is clueless. Can’t read a quarterly statement or is on the take. Just take Apple’s Market Cap today of $424 billion. Apple has more than $137 billion in cash. That is a third. When Apple grows the cash to $200 billion or $300 billion, then what. $700 never again? When China sales is bigger than the USA, then what? Companies that grow at 30% plus a year double every 2 years in size. This is basic math not wishful dreams.

    I think this is FUD and useless information.

    1. “When Apple grows the cash to $200 billion or $300 billion, then what.”

      Stock will crash and burn as that much cash hoarding indicates a management that is more interested in banking assets than one that is interested in reinvesting for growth or investor value.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.