“Despite rallying on Wednesday, shares of Apple are still down more than 10% since the company reported Q3 earnings last month,” Adam Levine-Weinberg writes. “Ironically, this comes even as analysts have increased their estimates for Apple’s FY15 and FY16 earnings in the past few weeks.”
“Pundits have laid out a variety of explanations for why Apple stock has suddenly lost steam. Many point to tough sales and earnings comparisons in the coming year. Others cite weakness in China’s economy. Worries about Apple Watch demand have been another common refrain,” Levine-Weinberg writes. “However, all of these issues ultimately boil down to one key concern: that Apple is not a growth stock anymore. And the bears are half right. It’s probably true that Apple is not a growth stock anymore — but it’s not true that this is a concern. It just means that there could be some short-term dislocation as the investor base shifts from growth-oriented investors to value investors.”
“Apple’s sales rose nearly 30% year over year through the first three quarters of FY15, putting Apple on pace for more than $230 billion in annual revenue. EPS rose at an even faster 44% pace,” Levine-Weinberg writes. “Given these outrageous growth figures for what is already a massive company, investors don’t have to “worry” about whether Apple can maintain that growth rate. They can be certain that Apple cannot maintain that growth rate.”
“That doesn’t mean all is doom and gloom for Apple stock, though,” Levine-Weinberg writes. “While growth investors are heading for the exits, it’s a great time for value investors to buy the stock.”
Read more in the full article here.
MacDailyNews Take: Regarding Apple’s growth prospects:
Apple’s iPhone 6/Plus penetration among iPhone owners is a mere 27%. That means there are 73% primed for upgrading to the iPhone 6s/Plus. And, that’s not counting those fleeing from fragmandroid to quality in ever-increasing numbers. And iPhone has 99% user satisfaction. Every year or two, there are hundreds of millions of iPhone users waiting to upgrade.
Like PC sales, iPads have a far longer replacement cycle than smartphones, which turn over every two years (at most). Wholly unlike PCs. “iPad Pro” (likely) and, indeed, true iPad multitasking for iPad Air 2 and newer (also to debut this fall), await in the wings, with iOS 9 set to arrive in a few months. Older iPads need not apply of which there are hundreds of millions in use today. The first real round of iPad upgrades loom.
Apple Watch’s best month last quarter was the last month of the quarter, in June, as supplies finally hit stores and could begin to satisfy demand. Demand that is sure to grow as we approach the holiday shopping season.
According to IDC, Apple’s Macintosh has 13.5% market share in the U.S. and 7.5% worldwide. Apple’s Mac has outgrown the PC market for the last several years. Apple’s indomitable Mac has headroom of a mere 86.5% in the U.S. and 92.5% worldwide.
We won’t even get into Apple TV + Internet TV, Apple Pay, or Apple Music, much less Apple Car.
Apple’s growth rate could slow dramatically based upon two new factors.
1. Tim Cook’s redirection of the company to one primarily serving the LGBTQMIA demographic
2. The extraordinary expenditures Tim Cook is planning to save the world from the weather. The weather, being somewhat fuzzy, will require vast sums to fully control so the entire world has the precise temperature and humidity that Tim and Al deem to be right according to Gaia.
All this for .01C?
U.S. EPA Administrator Gina McCarthy admitted that the proposed steps to be taken would only prevent .01 degrees Celsius of warming, but it was the example that counted for the rest of the world. This in addition to the fact that, in 2011, she admitted she did not know how much CO2 was in the atmosphere. And its lines of evidence for this are provably false! Given the facts, I can’t help but wonder: Did policymakers ever take Economics 101, or a course in how to read a chart? — Joe Bastardi, meteorologist
All this for .01C?
Tim Cooks direction has earned record profits. His investments in green technology saves Apple money and the planets environment. It is a win win for Apple. Apple generates there own power so they don’t need to pay for utilities. They make money from it.
… to continue this theme, maybe Apple Inc. could offer to provide power to WallStreet & then when they are connected, switch the bloody lot off!!
Thanks for the great laugh, Lambretta Mike,
I also believe that the wall street is in the dark, even WITH THIER ELECTRICITY !-)
Maybe if things had gone the way of europe with vehicles that are high MPG (like the lambretta, my ’59 series 2 gets about 100 MPG) we would all be better off, but hey, amurikans gotta have power, no?
too bad this insatiable hunger for power has infected the whole planet
Apple, founded in California, used to have a rainbow logo. Do you really think Tim Cook changed anything?
full circle, i get it, but Kent’s brain cannot handle, so shhh!
Apple has long advocated diversity and inclusiveness, and I respect the company for that.
The kent’s of this world are part of a shrinking (but highly vocal) group. I look forward to the day when all of these issues are non-issues. Humanity has enough problems without manufacturing irrelevant ones.
sounds like your just filled with hate. If you don’t like the product don’t buy it. You order won’t hurt Apple. Apples logo used to be the rainbow- Jobs was gay friendly .and like it or not a lot of Apples team is gay -get over it .
There is no reason for its swooning except for the idiots who make up fairy tales of doom with absolutely no proof to back it up. There stupidity is the only reason period.
Oh, yeah, the one reason could be Tim Cook alienating and insulting constantly 80% of the world population.
Once again, Kent, you fail at spreading FUD
In U.S., 52% Back Law to Legalize Gay Marriage in 50 States (gallup poll)
Americans would legalize gay marriage nationwide, favor equal rights for such unions, in spite of you and yours hatred for love.
Oh, yeah, the “20%” that you seem to discount are the ones with education and money, and gee, you probably have neither, but it is obvious you can’t think your way out of a paper bag, so if you do have any go throw your money at android and windows and leave us alone finally
I have plenty of both, eMo, and you are full of crap.
Enjoy your ride on the kent train of intolerance.
With Tesla down nearly 10%, those sellers will have to find someplace else to move their money. Maybe they’ll throw a few crumbs to Apple.
I think this gross move is simpler than the analysts want to say. It may well be simple manipulation…a short sell to create a good market for repurchasing the stock at a lower price. I wonder if anyone has really dug into this issue. Fundamentally, this is a far more expensive stock than it appears to be allowed to demonstrate. In this range, it just might be easily manipulated.
Nobody, but NOBODY has the financial muscle influence (manipulate?) an equity that, on a normal day, trades $5.2 BILLION in shares, and to depress that equity for 5+ months.
Further, it’s hard enough to get 4 or 5 people to agree on an action, let alone the 1700 institutions that own AAPL. Blaming AAPL’s decline on manipulation demonstrates a complete lack of knowledge as to how the market works.
Tim took the air out of my balloon when he did the rainbow parade. Not sure how many others he affected. Making his personal preferences public hurt peoples view of him all over. Steve was much wiser. Beats and Apple Music make me and many others yawn. Apple Watch could have been more thought out and was announced too early and released too late. Its form factor is not modern and game changing like Steve’s products were. Software is second to hardware form factor. The watch looks like it is for 40 yr olds because it was designed and tested by 40 yr olds. The first focal point in any device is “Will teenage girls buy it?” Tim should adopt a teenage girl…would do wonders for Apples future. Steve tested products like the average user.
Tim’s goose is cooked.
Once more- and then no more…
Stock price is not the same as value of a company
The stock market exists to… take a suckers money
Institutional traders don’t care about AAPL- they care about turning cash.
You are powerless to control an investment,
The market is not “against” AAPL, the market is against you.
Capitalism is a crap shoot.
pay attention to the value of the products a company makes, and not the value of the company itself.
Valuation is a myth.