Investors have been “penalizing the company heavily ahead of what is expected to be the slowest year on record for its key product — the iPhone,” Dan Gallagher reports for The Wall Street Journal. “Apple’s share price ended 2015 down 4.6%, marking its first annual drop in seven years and underperforming all major indexes.”
“But that selloff now looks overdone, even if one accepts the prevailing view that the iPhone 6S won’t register much if any growth,” Gallagher reports. “Consider that Apple is now the cheapest stock among the 10 largest tech companies in the S&P 500, once its huge net cash pile of $150 billion is excluded. That means Apple is cheaper than other growth-challenged giants like Microsoft, Oracle, Cisco Systems and International Business Machines.”
“Tech investors have been gravitating toward growth stories; Amazon and Netflix more than doubled in 2015 while Apple languished. But while rapid growth may be sexy, raw earnings power shouldn’t be discounted,” Gallagher reports. “And Apple earned more in its last quarter than those two companies have in their entire existence — combined.”
Read more in the full article here.
MacDailyNews Take: Investors have nothing to do with it. Traders are the issue, not investors.
One more time: Apple earned more in its last quarter than Amazon and Netflix have in their entire existence — combined.