Apple: What’s it really worth

“Shares of technology giant Apple (AAPL) have been reprimanded severely by the stock market over the past six months. Traders drooled with a utopian passion until one day last September when ardor suddenly cooled,” Richard Finger writes for Forbes. “At one point, down over 40 percent from a $705 high, AAPL has since made a nice rally from its March 4 bottom… The most creative company with the planet’s most innovative products that have touched hundreds of millions of lives, if one credits all the dour news, is limping badly. Targeted for irrelevance, apparently there is no more growth to be had for this aged dog. If I covered up all the above names you might think I was talking about Microsoft.”

Finger writes, “Some facts tend to get in the way of all this negativity. For the full year 2012 Apple shipped 136.8 million handsets worldwide representing a 46.9 percent increase over 2011. For the holiday season fourth quarter of 2012 Apple’s smartphone shipments came in at 47.8 million-up from 37 million units in Q4 of 2011, a very respectable rise of 29 percent. Apple’s overall market share went up in 2012 to 25.1 percent from 18.8 percent in 2011 – over a one third improvement. In 2012 Apple shipped 65.7 million tablets in a total marketplace of 124.9 million for a 52.6 percent share. IDC recently revised tablet forecasts for 2013 to a total of 191 million units with Apple slated to sell 87.8 million reducing projected market share to 46percent. Pushing 87.8 million units out the door in 2013 would represent a 33.6 percent increase over 2012 numbers.”

Finger writes, “Apple is growing and will continue to do so. I’ve discussed only two products so far. Don’t forget about the ubiquitous Macs. No, desktops are not dead yet. There are iPods and iTunes to consider. Rumors swirl that this will be the year of the iWatch and the Apple Television. A cheaper low-frills iPhone for emerging markets will most likely be added to the arsenal as well. In short It is a company with a lot of weapons that can hit winners from anywhere on the court… While there are some good analysts, most have never had the experience running so much as a convenience store, and, as such, lose focus on the larger landscape, their minds’ eyes suffering from tunnel vision and myopia. Apple is way undervalued at these levels.”

Much more in the full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

32 Comments

      1. We get your sarcasm, but that’s a silly way to make it. First, he probably already has AAPL stock (if he has funds available). Second, obviously no one would give up a profit of $550/share by buying at their future-target price today when the stock is lower.
        Third, his point might not even be that the stock will actually be valued by the market at that price any time soon, but rather that it _should_ be valued at $1000 today, but that there are illogical factors in play right now.

        In fact, the stock market seems to be a rigged gambling game – don’t play unless you’re in on the cheating (or can predict specifically what the cheaters are going to do).

        It seems to be a case of “You can fool too many of the people too much of the time.” That also seems to be true in politics and news, unfortunately.

        1. The market is never wrong. AAPL is priced exactly at the value that people are willing to pay. No one will pay a thousand bucks right now and that is how it is. It is only worth what people will pay for it.

          1. #s ro,
            “The market is never wrong. ….. It is only worth what people will pay for it.”

            I think you were trying to be sarcastic but it really bombed.

            The market is usually wrong and …. late to lunch.
            What people pay and what its worth are two very different things. How many times have you heard of someone buying a painting or pottery at a house sale for $20 and later selling it for $200,000. Just because some dull blogger does not know what Apple is really worth, does not make their super underbid correct.

            Just a thought.

            1. My statement is 100% true and accurate. If you want to sell your house in a bear market, it is worth exactly what you sell it for. If the seller is willing to pay more, then that is exactly what it is worth. The market is NEVER wrong. Your valuation is wrong.

        1. Your point is well taken EXCEPT that the original post seems to say that the stock should be worth that NOW. December 2014 is a completely different story and I think that it ($1000) definitely could be a possibility. (I am counting on it)

  1. Apple is fine. Just don’t get caught holding the bag next time. Remember what investing is all about, profit. You should have a chance to make profit by the end of the year if you invest now. But that’s true with many, many stocks out there. Some with much greater potential and no more risk. So don’t be so foolish as to think that AAPL is your only way to invest in the stock market. But it should be a good one at least for the next eight or nine months. Also remember to diversify. Don’t put all your money and AAPL. Look what can happen. Be smart. Be diligent. And don’t be greedy. But most of all realize that any company’s stock that shoots up beyond fundamentals and technicals is dangerous. Never fall in love with a stock. Don’t ignore the facts. Don’t try to rationalize huge gains thinking that it will continue forever. It won’t. Buy-and-hold forever is not investing. The last six months have proven that beyond a shadow of a doubt.

    1. Buy and Hold over the long term is investing. One year is not a long time. Over a 10-15 year period a diversified portfolio will beat inflation by a healthy margin. Unless you are managing your portfolio as a full time job, you should be happy with this.

      1. Buy-and-hold forever is not investing it’s just guessing. Buy today and in 10 years your stock has dropped 25%. How smart is that? You have to manage your money. That doesn’t mean market timing or daytrading it just means be smart about managing your money. If you make a good profit remove that profit and wait for a better entry point. Doesn’t have to happen every other month. May not happen that often. But you’ll know when it is time. Kind of like last September! And please tell me how holding since last September has been smart. Yes, you may get back to that $700 level again but look at all the money you have lost in the interim. Lost opportunity to put the profit you should have made in September back to work now. Sorry, you can’t talk your way out of that one. And if you want dividends, there are much better choices out there than AAPL for dividend investing. And remember, you don’t always know when you are going to have to pull your money out of an investment. Shit happens in life. As I stated earlier, buy-and-hold is just guessing. The only people who defend that are people who are too lazy or don’t know how to manage their own money. And also the people who are way, way, way under water in AAPL. Invest smarter. Don’t be greedy. It’s your money.

        1. I noticed that the ratings for your comment were only 2.5 for 15 votes. Yet, you are right on the money with your observations. I guess the truth hurts for some of the readers. Either that or half of them have no clue as to how the stock market works and should put their money someplace else.

            1. Goodness from someone who is universally despised on the site, that’s an interesting comment. One of your latest postings is you hate Americans. I’m proud to be an American. I think that pretty much says it all for you.

    1. Nah. The stock will go up from here. Just not straight up. When they bring out the bigger iPhone, that’s when it kicks into a higher gear. The more affordable emerging-market iPhone coming this fall will help a little bit too. Getting China Mobile will be immensely helpful. But it’s that larger iPhone that will kick it in the ass. And it’s a shame that it won’t come until early next year. Because the stock price could use it right now.

      1. But it’s certainly in the toilet today. Apple could use some good news. Some good PR. They’re treading water at best. A nice announcement about an increased dividend and increased share buyback would be sweet today.

        1. Geez fanboys! Don’t get mad at me because the fucking stock is down nine dollars this morning. Learn to diversify with your investments. Not all stocks are down today. Don’t get mad at everyone because you’re losing money. Hand over fist.

          1. Just because people can’t stand your patronizing, vitriol, annoying comments makes them fanboys? This comment confirms what a douche you are. Please don’t feed this troll folks.

            1. Patronizing? Apparently you don’t even understand the meaning of the word. It’s too bad you can’t stand it when other people have an opinion. You’re entitled to yours even if it is wrong. Me a troll? Hardly. But yes, you will are the ultimate fanboy.

            2. What would you call responding to posters explaining their long term investing philosophy with your buy and hold is dead drivel like their children and taking pleasure in rubbing it in? Think your the one who needs a dictionary, smack right across the side of the head. Bashing people as fanboys for down voting your posts is considered an opinion? That’s called a mean spirited jab, not an opinion jackass.

              Lol, I’m a fanboy? My initial post questioned management’s ability to inspire investor confidence. You need to work on your reading comprehension douche.

      2. AAPL can still go up and be grossly undervalued just like it has for the last few years. Be prepared to stomache the volatility coming until the new product cycle hits and gross margins improve.

  2. Sure, stock declining hurts the investors however if Apple continues to produce/innovate new products and maintains good customers service and be in the fore front of emerging technology…… Stock price will take care of itself.
    Current stock prices are expectations from Wall Street and changes as new products are put in the market.

    Zimer

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