Apple Stock Dips to 80-Day Low of $530

| Analysis

Shares in Apple Inc. closed at almost a three month low on Thursday, ending the day at $530.12, down $15.955 (-2.92%), on heavy volume of 25.6 million shares trading hands. That’s the lowest close since February 28th, 2012, when the stock closed at $525.76.

AAPL has been on a bit of a roller coaster ride during the last three months, as the stock rose to an all-time closing high of $636.23 on April 9th, only to give away most of those gains in the last few weeks. The chart below tracks Apple’s three month stock performance.

ThMonth AAPL Chart

Three Month Chart of AAPL, with Circles and Arrows
Source: Yahoo! Finance

On the other hand, if you look at the last three months in the context of the last 12 months of trading, you get an entirely different picture, which we have conveniently supplied below.

12 Month AAPL Chart

One Year Chart for AAPL, with More Circles and Arrows
Source: Yahoo! Finance

In that context, we see that Apple is still flying high, and is trading well above the levels set when Steve Jobs resigned and then passed away in late 2011. It’s also up some 30.9 percent in calendar 2012, after the stock ended 2011 at $405 per share.

So what’s going on to push the stock around so much in the last few weeks? First, there was the run the stock in March and the early part of April, as investors were excited about the new iPad, rumors of an Apple television set, and giddy anticipation of an iPhone 5. All those gains make for some attractive profit taking when you’re worried about the global economy.

Indeed, global economic worries have everyone in a rut, and the ongoing debt crisis in Europe has been compounded by political turmoil in Greece that could result in that country pulling out of the Euro (as in €). There is considerable worry that if that happens, other countries could choose or be forced to do the same, with the possibility of the whole thing unravelling.

There’s also been concern of slowing iPhone sales ahead of an expected upgrade later this year, and the possibility of carrier subsidy plans having a deleterious effect on iPhone sales, too.

The end result is that while most still think that Apple is the bee’s knees, investors have simply been in a selling mood. In fact, let’s compare AAPL to the performance of the three major U.S. indices:

AAPL vs. DOW vs. NASDAQ vs. S&P 500

Apple vs. DOW vs. NASDAQ vs. S&P 500, with Our Leftover Circle and Arrow
Source: Yahoo! Finance

This chart shows us just how well that AAPL has done compared to the entire rest of the market, especially in the last three months.

*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.

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5 Comments Leave Your Own

b9bot

And the question is still WHY?
Apple’s performance has been stunning.
Apple has no debt.
Apple has a cash reserve that no company in the world can match.
Apple has products that no company can match, only copy or imitate poorly.
They can’t compete against Apple so now they sue Apple for the dumbest things trying to get rich from the best performing company.
So the question again is WHY?
The value of Apple stock should be at $800 a share by now if it was any other company with as much going for it as Apple has.
Lame excuses is all I read about. Greece, which has no impact on Apple what so ever. Nothing I’ve read speaks to Apple.

skipaq

There is a real fear of another spring/summer economic slowdown like the last two years. The markets are down overall. Apple has been hit a little harder due to profit taking. There is also the Facebook IPO and some may be selling in order to have the means to cash in on that roller coaster ride today.

Now is the time to buy Apple.

wab95

Now is the time to buy Apple.


Indeed. One can only hope it dips yet further, spurred by jittery and fickle speculators, before rebounding.

NEALC5

I think skipaq is correct.  It just dawned on me that a number of mutual funds would be selling Apple (and taking profits) to buy Facebook.  They must believe that Facebook has a better chance of gaining share price than Apple.  It seems to be no longer about fundamentals, and more about technical analysis, and gambling on trend lines.  Apple has tremendous growth and yet it trades at a lower PE than the market as a whole, and lower than big industrial conglomerates, such as Honeywell and GE.  And don’t get me started with Amazon’s PE!

All of the negative articles site technical analysis, speculation of what might happen in the future (with Windows 8 tablets, phone competition, etc), the loss of Steve Jobs’ magic influence and then totally discount market in China.  They site what happened to Sony, Microsoft and RIM, and say, see, it will all happen again.

Apple is different, and has always been different. When they were NOT different, and tried to do what the analysts wanted (between 1985 and 1996), they failed.  Do you think Apple management is crazy?  They have internalized a PROVEN methodology, and will do what they need to do to keep Apple’s success going.  Which always meant doing the opposite of what short-term thinking industry analysts and Wall Street says.

skipaq

It is just a hunch @neal. But someone could have sold 100 shares in Apple to roll the dice on Facebook @ $40 per. Sell that at the right time and you could buy 200 or more Apple shares and catch it on the rebound. Lot of risk would be involved.

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