Apple investors who sold after earnings blew it

“On Tuesday July 22, tech giant Apple released its earnings to an anxious market,” Jamal Carnette writes for The Motley Fool. “Overall, the company beat analyst expectations on the top and bottom lines, posting $49.6 billion in revenue and EPS of $1.85 versus consensus figures of $49.4 billion and $1.81. On a year-over-year basis, those numbers are up 33% and 45%, respectively, as Apple appeared to overperform.”

“So naturally you’d expect a strong surge as investors reacted to a rather successful quarter… and you’d be wrong,” Carnette writes. “What happened instead was a 7% after-hours drop and myriad headlines declaring Apple’s ‘disappointing earnings.’ And while Apple beat Wall Street analyst figures, the company fell short of the “whisper number” that speculated Apple would sell 50 million iPhones.”

“The reaction to Apple’s earnings confirms that investors expectations are highly irrational,” Carnette writes. “Personally, I’d say selling Apple off to the tune of 7% for a slight miss on its aging phone iteration — even while beating analyst expectations in revenue and EPS — falls in the category of irrational actions. If you’re a long-term investor, you should be encouraged with Apple’s results… I believe in buying great companies and letting them operate. Long story short, I think Apple is undervalued and I’m willing to wait through Wall Street’s irrationality to find out.”

Read more in the full article here.

MacDailyNews Take: Unless they shorted it, of course.

11 Comments

    1. AAPL has been nearly flat for about half a year, as seen on the iPhone stock app, so why are we talking about this, unless we are promoting high frequency trading?

    2. exactly.

      most “anal-ysts” couldn’t even produce a simple PIE chart from basic PLUM trajectories and adjust +- for BUN.

      makes you wonder how they even got into business school in the first place.

  1. The people who sold seem to be agreeing with the opinions of analysts who have consistently been wrong about Apple’s performance. Hardly seems the best way to invest.

  2. They seem to be all doom and gloom one minute about Apple and then talking it up again a few days later.

    They wouldn’t be selling before all of the gloom and buying before being all upbeat again, would they?

  3. Analyst estimates used to be published in various charts but nothing recent can be found. Would like to know who contributed to the high end for the recent and next quarters.

  4. I doubt that those who sold were private investors. The speed of the reaction indicates that these are professional investors. More than likely they were using fund money to move the market. This is a problem I have with investment funds. There is no transparency about what the managers are doing with our money.

  5. How disappointed, AAPL tanked two quarters in a row!. I wish I pulled the triggers before the earnings as well. Anyway, what’s done is done. Let’s moving on, hoping for the better.

  6. Day traders and other short term ( sometimes measured in nanoseconds) trades are an economically worthless exercise.
    but traders need to trade up or down and want any excuse to place a ‘bet’.
    Apple have so much dosh in probably every bank in the world, that they can ignore the speculative crap and get on with the business of making real things

  7. At the risk of sounding like a cold hearted SOB, I have no sympathy for anyone fool enough to sell AAPL after the earnings report. To those who held, good for you. You will be fine. Those who thought they could beat the big trading houses to the punch will be disappointed as their trades won’t go through as far as those from the big houses. They’ve got big fast pipes to the trade computers. Day traders don’t. Those who try to play the big traders game WILL LOSE EVERY TIME.

    Now who said, ‘a fool and his money are soon parted’?

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