Apple blurring lines between growth, value

“I’ve got to admit that Apple is starting to look somewhat interesting to this deep value investor,” Jonathan Heller writes for TheStreet. “I’m not sure we are quite there yet, but it appears as though the growth crowd may be throwing in the towel. Many loved the stock at $700, at $600, and again at $500, but not so much at $400 and below.”

“That’s one of the fascinating aspects of the markets and investor psychology; they’ll love you until they don’t, warranted or not,” Heller writes. “Is the April 2013 $400 Apple materially different than the September 2012 $700 Apple? Has the story really changed that much? Or is it the classic oscillation between greed and fear; where investors push stocks higher than is deserved on the upside, then push them lower on the downside?”

Heller writes, “Yes, the lines between growth and value sometimes blur, and investors will turn on formerly popular names quickly and aggressively. I saw it happen with eBay a few years back, when that stock got cheap enough to buy, and the rewards were handsome. So, Apple, I’ve got my eye on you. Where it stops, nobody knows, but I’ll be waiting. The company is expected to report earnings Tuesday. I rarely pay attention to one quarter’s numbers, but with such intense scrutiny of the name, it could be an exciting day. Consensus estimates are for revenue of $42.66 billion, and earnings per share of $10.12. Anything less could provide some fireworks, and perhaps a nice overreaction.”

Much more in the full article here.

9 Comments

  1. No there is no blurring except when you listen to the Anal-ists who want to blackmail Apple out of there savings. So they will continue the sell off until Apple does give them what they want. Then the stock will magically rise a little until they want more. There should be a Federal investigation on what’s going on here. I don’t think the anal-ists are driving the stock off of real world facts like sales figures and how the company is really doing. They are driving the stock off of how much profit they can make by blackmailing Apple to give them more dividend payouts. So the big word is sell until Apple does something about it. It’s not about the business, its about how much they can fill there pockets with.

  2. The article quoted Heller as asking, “Is the April 2013 $400 Apple materially different than the September 2012 $700 Apple?” Yes, yes, it is: It has significantly more revenues and generates significantly higher profits and free cash flows.

    But, hey, we’ll just ignore those facts because they don’t fit in with the current de rigueur thesis..

    1. +1

      If Apple releases increased dividends to shareholders, then its stock trajectory will hereafter track the same flat line that MSFT does, no matter what company earnings. It will be just another utility “value” stock.

      If, however, Tim Cook gets off his ass and uses Apple’s pile-o-cash to develop and market new software enhancements, new hardware options, or _gasp_ any new product of any kind, then stock price will completely rebound and the growth stock cheerleaders will get off the sideline bench.

      Your move, Tim. We’re all waiting.

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