“That Apple, after a 41% drop from an all-time high of $705.07 on Sept. 21, gained no ground despite a doubling of its capital-return plan shows that it is still valued for growth, not for income potential,” Tiernan Ray writes for Barron’s.
“Tuesday’s earnings report, although better than expected, appeared to provide fodder for the bears. Apple reported a respectable 11% rise in revenue, but also its first year-over-year profit decline in a decade,” Ray writes. “CEO Tim Cook’s remarks about there being ‘exciting’ new product categories in the fall basically affirmed bulls’ worst fears: It will be a long, hot summer before a “catalyst” arrives. But the hand-wringing is overdone, and the company, and the stock, will recover in due course.”
Ray writes, “Anecdotally, critics assert that Apple’s lack of a large-screen iPhone means the company has nothing to sell. But Apple sold 19.5 million iPads in the first quarter, more than all the personal computers that HP, the top vendor, shipped worldwide. It also sold 37.4 million iPhones… The analysis of Apple’s finances lacks perspective and a familiarity with even recent Apple history.”
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