Shares of Apple Inc. fell to a ten and a half month low on Thursday, closing at US$525.62, down $11.26 (-2.10 percent), on heavy volume of 28.2 million shares. That's the lowest close since February 27th, when $AAPL closed at $525.76.
AAPL Chart for November 15th, 2012
Source: Yahoo! Finance
The stock has fallen $176.48 since hitting an all-time high of $702.10 on September 19th, a 25.1 percent decline that puts the stock well into official bear territory. The stock is still positive on the year, up $120.62 since closing 2011 out at $405, a gain of 30 percent.
That's small consolation to anyone who has purchased the stock in the last few weeks, however, and if the stock remained at these levels in the closing weeks of 2012, a 30 percent gain would make this the poorest performing year for AAPL in some time.
AAPL Chart for the Year
Bear factors weighing on the stock include a lot of selling before capital gains taxes rise in 2012, broad macro economic concerns, European worries, and growing fears that Apple has lost its magic (to be overly succinct on that last factor). This, despite the fact that Apple continues selling product hand over fist.
On Thursday morning, TMO covered a Cowen & Co. report that found iPad mini was enhancing iPad sales, rather than cannibalizing them. Several major analysts have also come forward with various incarnations of Apple's fundamentals remaining intact.
That hasn't had an apparent effect on Apple's stock, however, as it has continued to pull back. The stock is trading at less with a P/E of 12x (roughly 10x if you pull out the company's $121 billion cash hoard). This is very low for a tech company, especially a tech company like Apple that continues making money hand over fist.
In comparison, IBM's P/E is 13.35x, Microsoft's is 14.5x, Google's is 20.44x, and Amazon's is 2,979.82x (that's not a misprint).
If the bears have it right, Apple is doomed to a future of mediocrity. If the bulls, which includes almost all of the Wall Street analysts covering the stock, have it right, this is a temporary retreat that represents a buying opportunity.
Even Doug Kass of Seabreeze Partners, the man who helped spark Apple's sell-off with negative comments in October, has said the sell-off is overblown and that he is a buyer. That was when AAPL was at $547 a share, however, and it would seem that investors aren't yet interested.
*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.