“When investors buy a stock, they expect that company to post great revenue and great earnings every quarter. That, in turn, will fuel the analysts to raise estimates and shares will head higher,” Scott Rutt reports for TheStreet. “The company can then further reward shareholders with big dividends and stock buybacks.”
“At least, that’s the way its supposed to work. But in the case of Apple, the company did all of those things and shares have fallen in a straight line ever since,” Rutt reports. “Cramer told viewers that perhaps tomorrow will be the day that Apple can once again be bought based on its stellar, long-term story.”
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“Investors buy stocks because they want the companies to fare well in earnings. When the numbers are better than analyst expectations, they raise the estimates. On top of that, if you get a dividend boost and a juicy buy-back, there’s nothing like it,” Mohit Manghnani reports for Seeking Alpha. “If the stock is at a discount relative to the average stock in the S&P500, it’s like icing on the cake.”
“Apple had all of these things and it still went down by approximately 4%. If a stock like Apple cannot go higher, then the entire rationale of buying stocks flips on its head,” Manghnani reports. “‘Ever since we swallowed the Apple, the whole race of stocks seems cursed,’ said Cramer. He added that if the market does not care for the fundamentals of the biggest company, then it is bad news.”
“If Apple’s positive earnings can be skewed as negative news, then what can propel stocks?” Manghnani reports. “According to Cramer, once oil stops going up, and there is seller fatigue, along with a new winner like a bank or REIT, then the market can bounce back. Or, if Apple can rise from the ground, that will be positive for the entire market. ‘Oddly enough, though, I think that’s the most likely scenario. I think Apple should be bought here,’ said Cramer. He added that it is always a good time to buy a high-quality stock with strong fundamentals like Apple.”
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MacDailyNews Take: Plus, the company provides strong guidance. Go figure. The market does its own thing. Rationality has little or nothing to do with much of anything.
