“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.
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