Analyst: Apple one of the most undervalued technology stocks in the world

“Note to Apple investors: Keep calm and carry on,” Patrick Seitz reports for Investor’s Business Daily.

“That was the theme of a research note Thursday by Drexel Hamilton analyst Brian White,” Seitz reports. “White, formerly with Cantor Fitzgerald, initiated coverage of Apple at his new firm with a buy rating and a 12-month price target of 200.”

The sharp correction in Apple’s stock this summer represents an attractive entry point as we believe fears surrounding China are overblown, concerns around difficult iPhone comparisons are short-sighted, and the appreciation for the implications of this transformational super cycle is surprisingly muted. — Drexel Hamilton analyst Brian White

Ray reports, “White called Apple ‘one of the most undervalued technology stocks in the world.'”

Read more in the full article here.

“Even though economic concerns in China linger, analysts said, ‘We believe Apple is planning a bigger push into Tier 3-5 (80-90% of China’s households) across Mainland China over the next 12-24 months,'” U-Jin Lee reports for TheStreet. ”

“Additionally, the firm believes that the tech giant could open up its next iPhone market in India, which is similar in size and density as China, with a population of around 1.25 billion,” Lee reports. “Overall, Apple’s new product launch, Apple Watch, is also another positive for the company.”

Read more in the full article here.

18 Comments

      1. Doubt the idea was to put an *end* to it, more like mitigating it a bit.

        Failed experiment IMHO, and demands by Apple to do so were short-sighted with no sense of the reality that is AAPL.

  1. Surely the guy jokes about India. China vs. India is night and day. Check out Gemini Personnel report on salary survey in China. Mind you, the monthly salary is based on a 13 month pay. Then ask any of your friends in India how salaries match up.

    The notion of a BRIC is outright fantasy. Only China is doing the right thing by way of their people. I am just worried that more and more Chinese are being educated in the USA, they will be infected by the IVY league virus (aka selfishness).

    1. Wall Street isn’t guided by morals or ethics. I think of them in the same way that I think of a well-dressed man sitting in a church, bored by the sermon, glancing at his Rolex every five minutes, checking out the ladies in their Sunday bonnets, texting his bookie, then swiping money from the collection plate as he leaves early.

      1. Thanks for the reply, especially since I meant to say: “It goes to figure, the ethical and moral values [of Apple] are diametrically opposed to those of wall street, nothing to see here.”

        You had me at your first sentence. I nodded when you introduced the bored sermon analogy, thumbs up at the Rolex glance, though realizing a few years from now someone using that analogy will probably the watch glance or better yet the ring fist. Checking out ladies in church that’s so risque but hey you kept the bonnets on so I’m kewl with that, cheers for texting the bookie and doing something pseudo productive, but that swiping the money from the collection plate stuff, that’s standing ovation.

        Encore encore please, is there an analogy for what he does when he meets up with the priest after the sermon of is that not for daytime viewing?

        Loved it… bravo, I’m still clapping.

  2. In 2012 aapl reach a high of ~100 and then dropped down to as low as 56 during 2013. At the end of the year it start to rise again. We are in that same cycle now but not as extreme. The stock will take off again probably at the end of the year in anticipation of the Xmas quarter numbers.

    1. You and I hope, but I wouldn’t count on it. I see the pattern you’re talking about but why is this? This pattern should have little to do with 2012 because 2015 iPhone sales are continuous. Samsung tossed Apple a curve in 2012 and it was real, but there’s no challenger putting Apple to task right now. Apple is definitely selling lots of iPhones. This year’s drop is based on China predictions, and there’s nothing certain about the future.

      Only Amazon doesn’t seem to be affected at all by China because I guess they don’t sell anything over there.

  3. No MDN take?

    It is such a no brainer to become overwhelmed with AAPL that WS want to put an end to it and erase AAPL history of 30% YOY for the past 12 years…

    Do the math and don’t forget they splitted the stock 3 times.

  4. Keep in mind that most analyst recommendations, and even pundit calls on a stock’s price is for the SHORT TERM. All this talk about manipulation is for the SHORT TERM. And most important, there is a big difference between a TRADER and an INVESTOR.

    A trader is a speculator. A gambler. Someone obsessed with the short term. They could be a day trader, or someone who holds a stock for weeks or months.

    An investor focuses on holding a stock for the long term, e.g., many years. They view a market manipulated dip in a stock’s price not with dismay, but as an opportunity to buy shares of a stock at a discount. When Wall Street drives down the price of Apple stock from things like “China concerns” (e.g., fears of what could be, even if those fears are not justified), but the fundamentals of the stock (that is, the financial results of cash and earnings growth) are still positive, that is an opportunity for you, the investor.

    Remember, if I said that Apple products were on sale by 30 percent, you’d race to your local store. But if I said that Apple stock is down by 30 percent (because people are “worried” not because of any basis in fact), MDN readers freak out. Meanwhile, people like Warren Buffett or even a Carl Icahn are rubbing their hands and buying a ton of a company’s stock.

    Why? Because this silly fear HAS PUT THE STOCK ON SALE.

    Folks, that’s what I see with Apple stock. It’s undervalued. It’s on sale. As in, it’s a flippin’ buying opportunity.

    People often sell stock because Henry Blodgett, CNBC, Forbes, Barron’s, and Marketwatch all trumpet that a company like Apple is doomed. They infer the company will go out of business tomorrow. And small investors sell at the wrong time, because the stock’s price is down, not because its fundamental talks are. Then, six months from now, when Apple’s stock has shot way up, you’ll be smacking your palm to your forehead for missing an opportunity.

    This is one such opportunity.

    The truth is that Apple is barely scratching the surface of a country like China. Yes, China’s growth has slowed somewhat. But that was inevitable. Know this: China’s economy is still growing, and at a much faster pace than most other countries. And that the percent of its population that own a high-end phone is still relatively small. Which means that in the future, millions more Chinese will eventually own a high end phone.

    India still has a low penetration rate for mobile phones. But over the next two or three decades, this will change dramatically. The same is true for other countries in Southeast Asia, Africa, Latin America and elsewhere. That is because over time, the GNP of these countries will grow. And as they slowly emerge, their populations will aspire for the kinds of products that Apple makes.

    Bottom line: Think long term. successful investing involves patience, and sometimes a strong stomach. Trees don’t grow overnight. Nor do good investments. That’s why tuning out the noise and BS from Wall Street will make your life much happier. They want to manipulate you with fear. But what made a Warren Buffet a billionaire is that he sees dips in a stock’s price (when its fundamentals tell a different story) as a chance to buy shares of a great company at bargain price.

    You should too.

  5. The only people who continuously talk about ‘stock manipulation’ are those who know very little about the stock market.

    You could theoretically manipulate stock of some small company. You may be even able to manipulate some mid-cap stocks. But when a stock has total market value of over $600 Billion, and almost two thirds are in the hands of institutions (which tend to buy and hold), there is NOBODY on this planet with financial might that’s strong enough to manipulate such stock to generate the movement we’re seeing in AAPL.

    The reason AAPL doesn’t reflect the growth potential of Apple is rather simple: Apple is already the largest market cap in the world, and there is nowhere to go from here. Investors who buy stocks like to look for potential of market cap growth. When AAPL was small, or medium-sized, Wall Street was very excited by the explosive growth of revenue and profits, and they were ready to ride it to the top. Now that Apple is on top, many simply don’t see how much more there is to go, and would rather look for the next AAPL (i.e. small- or mid-cap company with explosive growth). Wall Streat doesn’t like to make a little money; they prefer to make a LOT of money quickly, and AAPL simply isn’t positioned in a way to allow them to believe they can make a lot of money quickly. In other words, they are, for the most part, finished with AAPL and are looking for the next one.

    The main problem with such thinking is Apple itself. The company is truly unique in every respect; it breaks every rule, it goes against all stereotypes for large-cap companies, it operates completely opposite from other large-caps and is in every possible way an unpredictable entity for Wall Street that used to the same predictable corporate trajectories. Warren Buffet is the only one who articulated this quite clearly: “I don’t invest in companies I don’t understand. I don’t understand tech industry”. Wall Street loves technology, but simply doesn’t understand Apple.

  6. It’s not a matter of either manipulation nor is it a lack of understanding of the company by Wall Street.

    Why is it so hard for the MDN crowd of commenters to emerge from the cloud of denial and recognize the only reason AAPL is languishing at about a third of its real value?

    Again and again folks (yeah, I know you are tired of hearing it from me just as I am tired of hearing constant and irrational support for him), it’s Tim Cook and it’s that simple. He’s a totally inadequate leader of the great company he represents and until he’s replaced with a strong leader, what you see is what you get. And, no – I don’t know who that strong leader is but I absolutely am right about the reality of the current one.

    1. The only way this would be entertained by the market as a positive development would be if Cook were retained as supply chain chief, where he excelled, and was replaced by a charismatic, pragmatic former chief executive with notches on her gun belt, namely Angela Ahrendts. That would turn things around, big time—maybe not directly helping Apple’s prospects, so much; but it would be a welcome change in the conversation about how Apple is declining—from a narrative centred on Tom Cook’s many failings, to a fresh new one: a great new reality show featuring fashionista superstars—Ahrendts and Ive—doing battle over whether rose gold or space black should be promoted in their advertising; and such like.

      Something Wall Street is more likely to understand.

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