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Are Apple Owners Panicking?

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Owners of Apple stock seem to be panicking about its recent price decline, but one expert has a different take on what investors should be doing now.

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So, what's the matter with Apple (NASDAQ:AAPL)? I mean, the stock is down 10%! We're ready to panic.

Well, you know the problem is that nobody really paid any attention to the numbers as Apple was going up, and now no one is paying any attention to the numbers as Apple was going down. What we're really doing here is we've got a reaction to the fact that Apple moved above $700. People are selling off, taking profits.

You've got a relatively recent negative news stream where everything seems to be important. So you've got stories about, well, there are not enough iPhone 5s to go around. Some of them are coming from the factories in China that have got scratches and dents and nicks, and Apple is sending those back, and they're shutting down some of the factories in China.

All this, you know, makes it seem like, well, Apple's this huge bubble and we're now seeing the real picture, and it's going to pop, and yada, yada, yada.

So if you look at it...one analyst's headline is, "Analysts cut forecast for iPhone sales." Well, the forecast was cut from 53 million iPhones in 2012 down to 49. That seems significant until you remember that only three weeks ago, the analysts were ratcheting it up from 40 to 50 million.

So all we're really doing is taking some of the hype out of this on the basis, with all the problems that we've got in terms of nicked cases and a lousy piece of software for mapping, and some people who are saying, "Well, you know, it's not any big deal, it just, you know, doesn't look that different than before."

You're seeing this stuff fly out of the stores-people are unable to get what they want-so indeed what we're seeing is profit-taking in Apple. We're seeing some people try to make money on the downside out of Apple.

And really the question is, OK, when we get around to October 25 or so when Apple does its earnings, are we going to see any real dent in a stock that's still only trading at 20 or 25 times earnings, is likely to say really nice things about the next quarter, which is when you're going to get the really big jump in iPhone sales?

So, if you can sort of hang on-or indeed, decide that you want to buy some when it gets down to a reasonable price, because you've always wanted to be back in-this is a correction in a stock that's had a really, really good rally. I don't think it's anything more than that.

Editor's Note: This article was written by Jim Jubak of MoneyShow.

Below, find some more great investing and trading content from MoneyShow:

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No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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