Refresh cycle bodes well for Apple

“After shooting up quickly from under $400 a share in late June to over $500 a share in late October, Apple (AAPL) shares have been stuck in a range of ~$500 to $525 a share since the,” Bret Jensen writes for Seeking Alpha. “I think this is temporary pause in the stock and is nothing more than a healthy consolidation before the next leg up.”

“One of the more interesting things about Apple is has how quick sentiment has changed over the last few months after a year of negative commentary. From the decline from over $700 a share in Mid-October to its bottom in late June, there was a rash of negative stories on Apple,” Jensen writes. “These stories had some similar themes. Among these were tomes written about ‘Has Apple lost its mojo?’, ‘Why Apple misses Steve Jobs’ and ‘Is Tim Cook the right man to lead Apple?’ I never put much stock in these treads. Instead I was very focused on stories around Apple’s declining margins that in my opinion were the main driver of the stock’s decline.”

“One of the key contributors of these declining margins was where Apple was in its product cycle, which escaped a lot of analysis. Once Apple began a new “refresh” cycle and launched its new versions of its iPhone on September 10th the company began a new refresh cycle that arrested its profit margin decline. The stock has mainly rallied in anticipation of this launch and then has continued to go up once the launch was more successful than anticipated,” Jensen writes. “The company is early in this refresh cycle which bodes very well for continued earnings & revenue growth as well additional capital appreciation of the stock.”

Read more in the full article here.


  1. “…which escaped a lot of analysis.”
    Too funny! Most analysts are too worried about important stuff like (1) Android market share growth, (2) deciding if Apple has lost its mojo or, (3) whether Apple can REALLY survive Steve’s death, and (4) how many angels can fit on a pin. Who has time to look at unimportant stuff like earnings and margins?

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