Why can’t Apple’s stock gain momentum?

“There are limits to everything. And as far as market caps are concerned, I think Apple (AAPL) has reached that limit at the $700 mark. Apple is not the only stock in this predicament,” George Kesarios writes for Seeking Alpha. “There are many other stocks that are also quite big and cannot easily double or triple over the very long term. In fact I think stocks like Intel (INTC), Cisco (CSCO) and Microsoft (MSFT) also face the same challenge.”

“The fact that these companies are too big to give investors a real thrill still remains a theme of mine, and it is one of the reasons I usually recommend these stocks mostly for swing trading, and not for long-term buy and hold portfolios, unless of course you like the dividend,” Kesarios writes. “Apple is a great value stock, an excellent dividend paying stock and a very stable and solid company, but do not expect the returns of yesteryear soon (if ever).”

Kesarios writes, “Is Apple’s stock a buy? Sure it is. It’s a solid company, a good dividend paying stock and it offers a lot of stability. If you are a conservative investor, then this stock is for you. And current levels are as good as any, especially now with the recent pullback.”

Read more in the full article here.

21 Comments

  1. The Market is a fickle beast and always wants to know ‘what have you done for me lately.’ I think Apple is a bit of a victiim of their own past success which set them way, way up on a pedestal. They need a new product to create an industry, like the iPhone and iPad did, but we all know just how hard that is to do.

    Look at what Tesla is doing to shake up the car inustry as an example.

    1. Wow thats a brilliant insight even including the Tesla comparison. To force a new product when it is not up to the job because the market ‘demands’ it is plain stupid and all those criticising for no product will be doubly harsh if it fails to do the job. Opportunities cant be done by the clock, they aren’t predictable and like buses may be far between but turn up two at a time. Perhaps social software is a whole area that they have failed to visualise well and exploit properly but then that is a whole new world to Apple as it is for most other mature companies.

  2. The NSA has ruined my trust in Apple products for good, unless there was a way to defy court orders like Steve Jobs would, but Cook can’t because of shareholder obligation. That Dick Tracy iWatch bubble is popped for me.

      1. You’re asking for more perspective? Supposedly nobody can hack 128 or 256 bit encryption. All this NSA decryption everywhere comes only from companies complicitly letting the NSA insert their backdoor hardware/software. I hear it’s possible for companies to expose the data before or after the encryption. Also, the NSA has tapped into microphones of phones even powered off, and possibly can access the camera. Apple rolls over to the NSA requests now, AS OPPOSED to Steve Jobs who would have just said no.

        1. A National Security Letter from the NSA or FBI is *not* a request. If Apple, or anyone else, does not comply, they are subject to all the legal penalties imposed and are obligated not to reveal anything about the situation. Steve would have “just said no” from jail.

          As for 128/256 bit AES, you’re right — no one can hack that (yet). But the details lie in the implementation. Procedures can be easily compromised when coded; e.g., one of the earliest attacks was based on the key being left in active memory.

        2. Excuse me it’s a broad bush of NSA invasiveness and so you’ll have to give up all of your portable devices no matter WHO makes them. Quit singling out Apple. So please hand in all your devices Android, Apple or otherwise and leave civilization because that will be the only thing that works under your mandate.

  3. Ok, so if a company is growing at more than 25% a year, how long until the company just buys the stock back?

    If the $457 per share grows with the company holding the same buying value then next year the same value would be $571 and the next year $714 and the next year $892 and the next would be $1,115.

    If it doesn’t go up then Apple’s cash of $145 billion would become $354 billion and soon after that, Apple could pay cash for their shares and take it private.

    If Apple releases some new cutting edge device, the talking heads will cut it in have and Apple would buy it even cheaper after the sell off the next day.

  4. Apple doesn’t go up because the institutions aren’t buying into it. I also feel that Apple’s products aren’t impressive enough for investors to get excited about. Apple is still seen as a company that doesn’t have a future. I don’t know why Apple doesn’t just buy itself a future. Acquire a company that is seen to have a future.

    Actually, I’m puzzled. I’ve looked at Apple from so many angles and Apple has things about it that would make almost any other company’s share value rise to the sky, but don’t seem to amount to anything of value to Apple’s share price. Would it be worthwhile for Apple to split into different divisions to release embedded value? Only why should it except for trying to get around Wall Street’s value walls. It just burns me how companies with low profits can be worth so much money where the share price is concerned. I can’t wrap my head around that concept.

    I can’t see how Apple’s P/E ratio is worth so much less than the rest of the tech industry despite having high revenue and profits. It gives me a headache trying to figure out what Apple can do to change it’s position given all that unused reserve cash. How can Google’s share be worth twice as much as Apple’s when it’s growth isn’t necessarily better than Apple’s and there’s no guarantee it will be in the future.

    1. You’re absolutely right. Like it or not all companies are judged to some degree by perception. Especially companies like Apple who have had such huge momentum swings with new innovative products. And of course it’s not what have you done for me lately but what are you going to do for me in the future. That’s true with all companies on the stock market. Not just Apple. You’re investing your money for the future not the past. Most investors understand this. Those who don’t complain here a lot. It’s not the SEC. It’s not a conspiracy against Apple. And the fact that Amazon has such a high PE ratio and doesn’t make any money has nothing at all to do with AAPL. Nothing. Same goes for GOOG,NFLX and other stocks that are bitched about here daily. The stock market isn’t a zero sum game. AAPL, just like other companies, stands alone and wins or loses by itself. As it should be. Perception matters. Of course it matters. It’s part of a company’s personality. Perception is that Netflix, Amazon and Google have great futures and investors believe in them. Maybe great things will happen? Maybe not? But the perception to investors is that those companies do have great futures. And getting mad because AAPL is doing poorly while these other stocks are doing great is just stupid. Quit worrying and bitching about other stocks. If you know they are doing so well, and they are, then invest in them! Unless of course you put all your money in AAPL and failed to get out the last 250 points. Yeah, there’s a lot of that going on here (except of course for those of you who claim that you have thousands and thousands of shares of AAPL that you bought at $10,sure you did). But don’t blame the world because you failed to sell when you should have. How much money has bitching about other companies made for you lately? The fact is that there is a bit of a negative perception around Apple right now. Not my point of view but that’s the general consensus. I wouldn’t buy anything but Apple products. I think the new fingerprint sensor can be a game changer for Apple. But to the public the new phones are not groundbreaking. That’s just the public. And you can’t get mad at the entire world. Although that’s exactly what many of you do here daily! If you’ve known for a year that AAPL has been in the toilet and Google, Netflix and Amazon are doing great then you have only yourself to blame if you’ve lost money. Investing is not about emotion. Quit acting like you’ll get hit by a bolt of lightning if you don’t invest in AAPL today. Actually no one will know if you sell. No one but your bank account. Use your head when you invest. It’s called common sense. Try using it. Quit blaming the stock market and analysts and the SEC. Stop bitching and whining all the time!

  5. Apple is being manipulated by Short Sellers who deal in Options. They are still probably 21 million shares short. Their operation is, Buy some puts, Short a few hundred thousand shares to drive down the Stock price by $5 plus. That will usually knock out any stops, and increase the share price drop. When they get it down $8-10$ per share, they cash in their puts which have gone up a lot. They then by a bunch of Calls, and start buying to cover and run it back up. They then cash the calls. These operations are helped by spreading negative rumors and outright lies about Apple. The exchanges love it since they make money on volume. Regular Apple shareholders have their pockets picked. The get stopped out and they have to wait 3 days to settle. Every Friday, these big traders figure out the price they will make the most or lose the least, and manipulate the Stock Price down or up to the exact Strike price they have selected. Many of these guys do naked shorting, so they have no skin in the game at all. They are not shareholders, they are value destroyers. The SEC would have to enforce their Rules or install an up-tick rule to stop it. Apple can stop it by splitting the Stock. These guys rely on the shares dropping several dollars when they short. If the stock was split 10 for 1, they would only get a decline of 59 Cents instead of $5 and they would have to go find a new Stock to attack.

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