The time to buy Apple is after the next plunge

“Since Friday, there have been three new ominous data points for Apple, which is scheduled to report earnings on July 23, 2013 after the market close,” Nigam Arora writes for Forbes.

“First Samsung reported lower than expected earnings estimates. Galaxy S4 from Samsung is the main rival of iPhone 5. Lower than expected earnings from Samsung are due to slowing sales of Galaxy S4,” Arora writes. “Taiwan’s HTC , another big player in the high end smartphone market, also reported lower than expected earnings… A report by Wedge Partners said that Apple has cut its iPhone production forecast by 20% for the second half of 2013 to 90 – 100 million phones.”

Arora writes, “If Apple were to report earnings close to the low end of estimates and there were no new product announcements combined with projections on the low end, the stock has further to fall. If such a fall were to occur, in my analysis it will be a buying opportunity…”

Read more in the full article here.

22 Comments

    1. When Samsung and HTC and Nokia sales are up it’s bad for Apple.

      When Samsung and HTC and Nokia sales are down it’s bad for Apple.

      See any lack of logic here?

      1. It’s always that way for Apple and shareholders. Apple is always involved in a lose-lose situation and it makes absolutely no sense at all but they continue to use this logic all the time.

        As near as I can tell, only Apple’s share price is affected by this logic but not necessarily Apple’s cash flow. Apple’s cash flow should remain relatively stable no matter what’s going on with those other companies.

  1. The moment may have passed. Apple is trying to out-wait the institutions. And one day, they could simply decide to snap up a large chunk of shares.

    Institutions are ones that matter in this game, but that being said, Apple is becoming large and powerful enough to cause them pain. What happens if Apple continues to grow and be successful? They could announce an even larger buy back and wait for the perfect moment to strike sometime next year.

    The Apple bears have been winning for the past 9 months, but it’s hard to keep a good company down. And if it’s a company that can move mountains itself, look out.

    The institutions may be able to shake out good indie investors, but after these buy backs, it will be more expensive to do so. If Apple remains highly profitable for five years, everyone on the bear side will be bloodied.

    1. Do you honestly believe that? I’ve loaded up with more shares but even I don’t believe Apple will go up that much. The best I’m hoping for is back to $650 or $700. Institutional ownership is around 62% but I don’t see it going over 70% unless both growth and dividend investors get on board. However, hoping doesn’t make it so.

  2. Looking at Global 500 reports today, Apple is @ 19 ranking from the top of the list with huge profitability, but AAPL is in opposite direction because of institutional manipulation.

  3. Nothing new here. Buy low. Sell high. It’s no secret that Apple is predicted to have a poor earnings report this month. That’s no revelation. It doesn’t take a genius to know that buying AAPL before this earnings is foolish. Buying any company’s stock before earnings is risky. And AAPL before earnings has always been dangerous. Saturation of the smart phone market will affect manufacturers. And obviously their margins. Well duh! Business 101. Will that affect some more than others? Well of course it will. But it will affect all eventually. There will be no exceptions. Margins will come down. And you can bet that the folks at Apple are smart enough to have understood this from day one. They have, like all manufactures, understood this because they’re in business! It happened with the iPod and will of course happen with smart phones. That would be the iPhone. You don’t hear much about the iPod anymore do you? So you can bet that they are working hard to move into other areas of profitability. As are its competitors. And that’s the key word, competition. Legitimate or not, the iPhone has competition. Doesn’t matter whether they’re copies or pieces of shit, people are buying smartphones other than the iPhone. It was inevitable. Had to happen. Although Samsung cloning the iPhone sped things up a bit. Apple makes the bulk of its profit from the iPhone. This will decrease as time goes on. The success of the company depends upon the transition to other areas of profitability. There’s always a chance that a new piece of hardware will come along from Apple. A profitable piece of hardware. But it’s services and the ecosystem that holds the future for Apple. My guess is that Apple will make this transition successfully. But only time will tell. So this guy just states the obvious. Buy low and sell high. Simple investing advice. Not sure why anyone would take him to task other than he states the obvious. He’s not behind some conspiracy against Apple. He’s not responsible for the smart phone market becoming saturated. That was going to happen whether he reported it or not. He’s reporting that Samsung sales and projections are down. So I guess he’s not a “bad journalist”. He’s not responsible for people failing to sell AAPL when they were way ahead. Hand wringing doesn’t help. Throwing things at the wall in anger doesn’t help. Blaming others doesn’t help. Claiming conspiracy theories doesn’t help. Paying attention helps. That’s where the phrase sell high comes from! Buy low and sell high is sound advice. It is the most basic investing advice you will ever hear. That’s the main point of this article. But it’s just common sense. Those who failed to use common sense are down 40% from September. Buy low means just that. Sell high is even more important. Sell. Remember that in the future. Don’t be greedy. Don’t be foolish. Buy and hold forever is not a plan.

  4. These analyses are full of crap and not worth the time it takes to read them. There is ONLY one time to buy AAPL – upon the resignation or firing of Tim Cook. Then and only then will there be any possibility of getting the price of the stock out of its now sustained condition of collapse. And even the, no guarantee that the damage can be undone. Ask Sony. Ask IBM. Ask Microsoft. It is what it is.

    1. But exactly what would change if Timid Cook is fired? Are you saying that anyone could take his place and suddenly Apple shares would be worth more. I don’t see that at all. I don’t really believe Apple’s share price is based on who’s running the company unless maybe it’s Jeff Bezos or someone who’s always trying to stretch the company much further than it is. I’d be concerned that firing Timid Cook could only lead to hiring someone much worse, if that’s possible.

      1. Tim Cook isn’t going anywhere soon. I don’t use the Steve Jobs reference very often but Tim was hand picked after all. Not many companies have a dynamic leader out front representing their company. There are a few here and there and it certainly can help. I would like to see, in some fashion, some sort of a face for Apple products. It would be great if Tim Cook were that person but he’s not. Steve Jobs was an evangelist. Apple could use someone with that enthusiasm. Apple may be cool and subtle but there was nothing subtle about Steve Jobs. The public is fickle. And why not? Why should they have any allegiance to a company? They don’t. Computers and phones are just a commodity. Nothing else to them. It’s not the Apple faithful that need to be convinced or kept in the fold. It’s all those other millions and millions and millions of consumers.

  5. Could be right, but I don’t agree with the reasoning presented in this article. I think AAPL is, objectively, a great buy right now for many reasons – but major investment groups clearly aren’t jumping in yet. AAPL usually dips down after earnings reports or product release events (even when it’s good news and hit product releases) so they could be waiting for that next dip to start the buy AAPL surge.

    Right now is a great time for any regular person to buy and hold AAPL and start collecting dividends. Precise market timing tricks is Wall Street’s sleazy and risky game. It doesn’t get any better for a typical investor than an undervalued stock in a profitable company that sell quality products to loyal customers – the buybacks, imminent product refreshes, and back to school sales just sweeten the deal.

    1. Regular person or hedge fund, it doesn’t matter. It’s either good time or a bad time to buy an equity. Cost is cost. Stock is at $414 today. Could easily drop to $390 in the next month. You are the math blaster so do the math. I’d say it might be worth waiting a little while if you have to invest in AAPL. Which you don’t. Supporting the company by buying the product because they make the best stuff is one thing. Investing your hard earned money as an investment is another thing entirely. That’s something that people here just don’t seem to ever understand. PCLN is up $50 in the last two days. AMZN, COST,DIS,CU are just a few that you could invest in until you feel comfortable investing in AAPL. If you have to. And you don’t. There are other companies to invest in. It’s your hard earned money. Don’t be foolish with it. Never put all your eggs in one basket.

      1. If it does go down to $390, you’ll be right – but that future is far from certain. It could even hit a new low at $350 as far as anyone knows. But it’s a bull market right now, the recession is ending, and stock earning season just started – if you decide to wait for that slightly lower price target, you could be waiting a long time while missing out on dividends.

        With a high water mark around $700, AAPL is certainly cheap right now. If you buy at $415 and hold until $700 or retirement (whichever comes first) – you will definitely start collecting dividends right away, and have AAPL in your portfolio at a relatively cheap price. AAPL historically climbs hundreds of dollars over years, and if history repeats here, a possible $25 lower buy in point won’t be significant loss compared to the gains. The stock market tends to go up over time – so as the old saying goes – timing in the market is not as important as time in the market.

        I think there is another dip coming, and it’s probably worth waiting for that to buy in – but that’s far from certain. A lower risk strategy based on more certain data is to buy when you know high quality stock when it’s low and start collecting dividends sooner rather than later. It’s up to each investor what risks they are willing to take. You’re definitely right on your last point – no one should put your eggs in one basket (even Apple’s) – diversify your investments!

    2. Don’t bleive SS is a ngood indicator. SS doesn’t have 300MM smart phone buyers who have had in general a great experience and a lot of who are waiting for the new phone and are unlikely to jump ship because they’ve invested a lot of time and $ in apps and music. I just bought my 1st iPhone (a 5). Next gen , I upgrade an wife gets the 5. Next gen after get the upgrade and my son gets the prior upgrade. The “unclean” are simply waiting for the sure to come BOGO for the S4. All of my recent feature pjoens were SS. However, have not bought anything SS since this IP theft by SS started.

  6. How many people here buy lottery tickets every week? What’s the cost basis and average ROI for that little piece of financial wizardry. AAPL is money in the bank. The best time to buy is when you have the price of a share.

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