Apple Still Delicious After Bruise
Moustafa is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Apple (NASDAQ: AAPL) was up close to 10% at one point on Tuesday in a daily move that was the result of "better then expected" iPhone sales. I have to ask, who was making these expectations and what planet are they from? It definitely could not be ours, especially in this age of social media, 24-hour news coverage and Jim Cramer. Am I the only one that remembers that there were store shutdowns, riots and overnight line-ups in the most populous country in the world when they released the iPhone 4S?
RIM (NASDAQ: BBRY) was slammed because they are being killed by Apple and Android, but we don't expect Apple to sell many products? Are these the same experts that have continued to be wrong about Apple every earnings report since the iPad? I have got to wonder how many times you get to guess wrong in the expert industry before you lose your title? If these experts were playing baseball, they would be sub .200 hitters and would probably be more deserved of their pay. If you’re going to make assumptions that will affect the market and erode wealth needlessly, you should have some sort of credentials. Apple had broken through the $600 plateau and then had a pullback for no other reason, and then no one could believe that the company continues to deliver.
I definitely won’t consider myself an expert but if all you read for the week as a company releases a product is how hundreds of millions of people are running, waiting and rioting over it, I will assume they sold many units. They announced a dividend, a share buyback; yet they generate returns in excess of their capital cost, maintain a cash hoarde, and have a solid grip on an industry that is only going to continue to explode. After this, their share price falls, the experts were doing their best impression of Chicken Little for no other reason then they think that it just can’t continue. I for one see Apple in an industry that is still in its growth phase affording the company the unbelievable potential to continue to grow. Based on company fundamentals, those fundamentals that the experts seem to skip, Apple is still relatively cheap compared to the overall market. Though the recent price dip was a great time to buy, now that the earnings report has caused a big one-day jump so you may want to wait for the next dip. I only see Apple's share price on a trajectory towards the $1000 mark in the not so distant future, so I will still be buying over the next months and increasing my position. They have strong product lines, strong market and a great management, if you just don't believe it can happen you probably didn't see apple as a $500 a share company either. I prefer to look at the fundamentals of a company, their compelling story and their ability to grow, and Apple has all of these in spades
mooseelz owns shares of Apple and Research in Motion. The Motley Fool owns shares of Apple. Motley Fool newsletter services recommend Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.