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What To Do With Apple Inc. (AAPL) Shares Now?

January 26th, 2013

buy-and-holdIf it wasn’t such a game of expectations, Wall Street would be honoring Apple Inc. (NASDAQ:AAPL) today and its stock would be soaring in the wake of another quarter of record sales and earnings. However, falling short of expectations in the investment world is like steppingout of bounds by only an inch, nullifying an incredible catch in football.

While CEO Tim Cook described Apple’s results as “extraordinary” on the company’s conference call late yesterday, the simple fact remains that by several key measures the company grew less than analysts expected. The disappointment is tangible, triggering a sell-off that’s taken the stock to levels not seen in a year. But it is also tempting, given that shares are now down 35% from their all-time high of $705 hit just four months ago. “I think you got to hold your nose and buy here,” says Eric Jackson, founder of Ironfire Capital. “In the past, when Apple has gone on runs, it usually comes when there’s this mass negativity in the air like there is now.”

Certainly, not everyone agrees with Jackson, as no less than six different analysts have cut their outlooks or estimates or price targets so far today, bringing the median price target down to $647 from $792 in a matter of months. Jackson says the fear about Apple running up against “the law of large numbers” has been out there for about five years, but he concedes that he is ”just not in that camp” and would be looking to add to his position.


Related ETF: Technology Sector SPDR ETF (NYSEARCA:XLK).

You can see the full “Breakout” interview below:

Technology Select Sector SPDR (NYSEARCA:XLK)

Top 10 Holdings (64.21% of Total Assets)
Company Symbol % Assets
Apple Inc. AAPL 17.54
International Business Machines IBM 7.12
Microsoft Corporation MSFT 7.08
AT&T Inc. T 6.70
Google Inc. GOOG 6.60
Oracle Corporation ORCL 4.40
Verizon Communications Inc. Com VZ 4.34
QUALCOMM Incorporated QCOM 3.72
Cisco Systems, Inc. CSCO 3.65
Intel Corporation INTC 3.06

 


NASDAQ:QQQ, NYSE:XLK


 

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  1. starling smith
    January 28th, 2013 at 08:51 | #1

    AAPl is AAPL and is not going anywhere. Their cash and equiv. are now 138 billion and no debt. The only flaw I see is their gross profit was flat. Their cost of manufacturing must have gone up or due to the shear numbers of units it may take them a while to get the costs down. Long on AAPL.

  2. troy
    January 27th, 2013 at 19:14 | #2

    @DrRoboto
    Also your complaining that Apple has sued companies who rip them off, included Franklin? You realize that Franklin directly copied Apples ROM code. Directly! Apple has innovated for decades, and others have copied their successes for decades. You are either for innovation or for copying innovation. I chose innovation.

  3. troy
    January 27th, 2013 at 18:58 | #3

    @DrRoboto
    The idea that Apple stole Xerox GUI is complete historical nonsense.
    1. While Xerox did give apple a preview of the smalltalk system, they did it for trade in stock.
    2. Apples imagination for the potential of the GUI was far bigger than Xerox, and Apple invented many of the concepts we take for granted: The “Finder”, drag and drop, resource files, Types and creators, direct editing of a document, clipboard, pull down menus, a unified windowing and graphics system (Quickdraw), self repairing over lapping windows and draw spaces, files and apps represented by icons, etc, etc, etc…

    So beyond paying Xerox, in the end, the Mac OS had little in common with Xerox Smalltalk system other than being “graphical” and having a mouse. Whereas MS Windows was a fairly direct copy of the mac with the required procedure and icon changes to avoid direct copywrite infringement.

    The same goes to Android, again a fairly direct copy. Before the iPhone, Android was a copy of blackberry, after the iPhone, Android retooled quickly to copy the iPhone. Android isn’t about innovation, it is about the cheapest way to build and give away a free OS to phone makers, so Google can embed their advertising and data-mining into deeper into your life.

  4. DrRoboto
    January 27th, 2013 at 17:04 | #4

    POP goes the Weasel! lol…. Apple’s Future is mired in it’s dependence on it’s legacy backwards compatibility and totally out sourced parts and assembly constraints. As well as their Cancer Med Deluded machinations of Steve Jobs always claiming everyone steals his ideas… and have always been Copying Apple. It started with suing Franklin Computers out of business even before he borrowed Xerox PARC Lab’s Mouse and GUI. Hey…. he had every intention of giving them credit until he realized they had preemptively stolen it from HIM and APPLE!

    When the real inventor step to sue Apple only after Apple had sued Microsoft…. the judge slapped them both down. But that didn’t stop Steve from claiming Microsoft stole his GUI and Mouse ideas. But… Microsoft wasn’t the first company Steve labeled the “Copyist” nor the last. It all goes back to Franklin Computers being the first company Steve Declared was the “Copyist”. Of course we all know Steve’s “Copyist” machination’s latest victim is SAMSUNG!

    But hey that’s what he’s always called any successful competitors! lol…. and in reality Apple has always been the Biggest Copyist of them all. Now the little tiff… they have with SAMSUNG… has alienated them from their best partner and parts supplier in the World. Yeah… you Religious iCrAppleholics are saying, it’s Apple who’s moving to TSMC. But…. you iFools need to realize that if it wasn’t for SAMSUNG making the first chips that went into iPhones in their partnership, iPhone and iPads wouldn’t have been possible.

    So here’s the reality Apple faces in the future. Samsung took away their volume discounts before they decided to have their chips made for an even higher cost in a foreign country instead of here in America. You all forget that any company choosing to pay more for parts they can no longer claim are made in America… are doing so for some other reason. Because in reality…. lower prices are not all they’re leaving behind. Any good multinational company knows SAMSUNG’s the Top Corporate Investor in America and that brings them some huge benefits in building the largest and most advanced Semiconductor Complex in America being an FTZ (federal trade zone)!

    But being the largest FTZ investor in America by far hasn’t only benefited SAMSUNG’s Profits and Revenue. It’s benefited Apple’s profits and revenue too in their own home land. Where they’ve never been higher than #43 on that CiCi Investors list. Ship those parts supplies to Taiwan and there goes some really great Tax and Duty Free benefits. No doubt eventually that’s going to affect this totally out sourced corporation’s bottom line and then you’ll all realize that suing their best parts supplier was such a huge mistake! ;-P ….and for you iDiots touting their Bubble Popping Market Cap? Well just chalk it all up to the curse of the Corporate Out Sourcer’s breaking the $500 Billion Mark Fall from share holder’s grace! lol…

    And the privilegeof being the only and biggest end to end device maker on the Planet! :D …btw.. if you notice, SAMSUNG isn’t stopping it’s $4 Billion Dollar investment in Austin Texas Semiconductor Expansion or their $1 Billion expansion in their chip design R&D Labs in Silicon Valley either! ;-P

  5. Taco
    January 27th, 2013 at 16:10 | #5

    Dear friends

    I did an analyses of Blackberry this autumn. Apple has exact the same pattern. Apple will show better results due to pricing and marketing in the end it is not a winning strategy. Blackberry collapse came in two waves. First the unpredicted, second the predicted. I think we are now in the second for Apple.

    I am not interested in the product it is about the trade. How can you recycle money from a main-street investor into a wall-street investor. Apple is perfect vehicle for that.

    But for all apple lovers Apple stock at 200 dollar is still a good value.

    But I stay short.

  6. ECB
    January 27th, 2013 at 13:24 | #6

    ALL:

    Most so-callecd blow-heart ‘analysts’ cannot be counted on to accurately predict the rising of the sun each day, much less being able to predict (guess) the future of an equity based on factual data. Jealousy, hype, ego- are all reasons for this lambasting of Apple. True enough, all products mature and level out, yet profits derived are still strong as people upgrade and replace older items, even the lofty touted Samsung has just announced that its future smart phone earnings will be leveling off, but no one is bad-mouthing Samsung (nor should they). Apple barely missed ‘expectations’ on a shorter reporting cycle (1 week less) and there was supply (not demand) issues, yet short-sighted ‘idiots’ downplayed the stock and even weaker-minded investors dumped the stock- which is probably set for a rebound. Apple \’s future is not in a tailspin, despite rumors to the contrary.

    The short sighted ‘analysts’ and ‘ (actually pundits) remind me of the short-sighted people who build their homes at the shoreline when all the data indicates that more storms are coming and the seas are rising, yet we build up the same old home again, in the same place and to the same junky construction standards (need concrete pilings and steel folks).

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