Apple: The market’s false correction

“With Apple’s share price already down 15% from its high in April, numerous business articles have announced that Apple is in a ‘correction,'” Mark Hibben writes for Seeking Alpha. “By the usual definition, corrections occur to adjust for overvaluation of a stock. Even at its all-time high, Apple wasn’t overvalued, making this a false correction.”

“Paul R. La Monica’s article about the ‘correction’ in CNN Money should serve as a comprehensive list of talking points for Apple critics for the rest of the year,” Hibben writes. “His explanation for the ‘correction’ is ‘disappointing’ iPhone sales and the Canalys report citing Apple’s market share decline in China in the June quarter.”

Disappointing iPhone sales: How disappointed can you be over a 35% y/y increase in unit sales?
• Declining market share in China: The focus on sequential changes in product shipment or market share has often been exploited by Apple critics to portray Apple as on the decline. Such portrayals are inherently deceptive.
Apple is too dependent on iPhone: Last quarter, Apple’s non-iPhone revenue was $18.237 billion. That’s more than Google’s total revenue last quarter of $17.727 billion. If we apply Apple’s corporate operating margin rate of 28.4%, then the non-iPhone operating profit would have been $5.178 billion, once again beating Google’s total operating profit of $4.825 billion.

“In the coming months we’ll probably hear all the reasons why Apple is going to fail repeatedly in infinite variation,” Hibben writes. “The difficult comps will get frequent mention. Leaked supplier reports will claim that iPhone sales are “disappointing”. Apple Watch will be an unmitigated disaster. The litany of negative speculation will seem endless. And it probably won’t end until Apple reports fiscal 1Q 2016 results next January.”

Much more in the full article – recommendedhere.

MacDailyNews Take: As fairly close followers of Apple-related news, we’ve seen this ruse numerous times.

As we wrote back in January 2012:

AAPL is like a buoy. Quick, it’s back on the surface! You there, analyst, and you, too, swim down and tug on the chain! Drag it under… lower, lower… Good! Now, quick, everybody jump on, and we’ll take a ride back up to the top again!

And, as we wrote in April 2012:

At the most basic level, it’s extremely simple: Pump, then dump. Foment, then buy. Rinse, lather, repeat as the SEC sleeps.

SEE ALSO:
Merrill Lynch cuts Apple rating; Jefferies, Global Equities foresee impending ‘disaster’ – August 5, 2015
‘The Curse of the Dow’ bites Apple – August 4, 2015
Apple enters correction territory: More carnage to come? – August 4, 2015
Analysts: This is the catalyst to push Apple higher – August 4, 2015
Why Apple’s next-gen iPhone 6s/Plus will generate 20% growth – August 4, 2015
Why there won’t be an iPhone 6s/Plus bump – August 4, 2015
Apple stock implosion shreds $113.4 billion and counting – August 4, 2015
About all of those reports that Apple is in dire straits – August 4, 2015
Continued Apple swoon could crush this market – August 4, 2015
Apple replacing AT&T causes Dow Jones Industrial Average to suffer – August 4, 2015
Apple stock now officially in correction territory as it crosses below key technical level – August 3, 2015
Nasdaq retreats amid tech selloff after Apple’s record results – July 22, 2015
Apple earnings: Good is never good enough – July 22, 2015
Cowen downgrades Apple on record quarterly earnings results – July 22, 2015
For Apple, more success raises more questions – July 22, 2015
Sorry, haters: Tim Cook confirms Apple Watch sales are much better than you think – July 22, 2015
Here’s how many Apple Watch units Apple sold – July 22, 2015
Drudge screams: ‘APPLE FUTURE QUESTIONED’ – July 21, 2015
Apple poised for $50 billion valuation loss after posting ‘disappointing’ record earnings – July 21, 2015
Apple shares plunge after ‘disappointing’ record third quarter results – July 21, 2015
MacDailyNews presents live notes from Apple’s Q315 Conference Call – July 21, 2015
Apple pulverizes the Street with record third quarter results – July 21, 2015

[Thanks to MacDailyNews Reader “Bill” for the heads up.]

29 Comments

      1. Maybe. Problem is, I think all kinds of blogs like this one and others do call these idiots out on a regular basis to no avail.

        And it makes me wonder is there truly nothing we can do though?

        Publicly shaming some of these guys a lá the Minnesotan lion ‘hunter’. Maybe that sort of tactic would work.

        1. I think the word “traitor” is much over-used. But I think it applies to this crowd – wreaking havoc on the economy and millions of people’s lives with their stupid games.

        2. I suppose you’re right. I have seen some scathing comments about analysts on their websites, but they still keep writing their stuff. Clicks count more than facts or performance, I guess. Ultimately, the job of these guys is to make money for the company, not for the individual investor.

  1. Google, Amazon and Netflix look stronger than ever. Microsoft had layoffs, recently took a $7 billion charge and lost a bunch of mobile market share. Even Microsoft looks stronger than Apple with it’s bullish P/E of 32. Apple is the biggest wet noodle of the bunch and the only company in the bunch to boast of a stinking, shrinking P/E. That’s what happens when you try to choose an investment based on decent fundamentals. You end up being a loser.

    Every highly valued company is now based upon perceived future growth whether it happens or not. Imagine the confidence one must get from being voted The Most Likely To Succeed in high school. Apple has been voted The Most Likely To Fail. Bummer.

  2. Given the rage that Apple is being unfairly evaluated I wonder if these “armchair analysts” would have the intelligence and insight to describe what Apple would do or not do to justify devaluation. I suspect Apple fanboys could not be the devil’s advocate. Any assessment that would be perceived as negative would be pure blasphemy.

    1. Gawd, give it a rest. This fanboy meme jumped the shark long, long ago.

      What’s the opposite of fanboy? Hateboy? Basementboy? Pathetically-and-incessently-negative-boy?

          1. Feathers ruffled, Silverhawk? I would expect such a thoughtful and cogent response from you. I was surprised with your capacity to use polysyllabic words. Congratulations.

            1. If you want to be sarcastic about someone’s English, you may want to demonstrate your own abilities with posts that are more than slight variations on the same droning negativity.

    1. “I could also add sniveling, whining, impotent, and incompetent”

      Don’t worry, if I don’t have any effect on your pathologically poisonous character, at least your posts are shown up to the general reader for what they are – empty and valueless ‘dumbass troll’ negativity.

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