Apple Shares Hit All-Time Closing High as Investors Await Next iPhone – WSJ (Feb 13, 2017)
I’m tying this story to the Apple is Doomed narrative because it would be easy to see today’s news as evidence that investors don’t think Apple is doomed at all. But if you take that approach, you’d also have to say that investors did think Apple was doomed nine months ago when its stock price fell to two thirds its level at today’s close, when in reality that movement tells you a lot more about investor skittishness than Apple’s actual prospects. Apple continues to be massively undervalued relative to major peers, and that reflects an ongoing skepticism that Apple’s ability to sell massive numbers of devices is about more than just smoke and mirrors. Apple is the exception in the consumer electronics market, which is otherwise characterized by low single digit margins at best, and I always suspect that some financial analysts think this is the result of some kind of sleight of hand that will eventually be exposed – there’s really no other explanation for the ongoing under-valuation. The massive swings in Apple’s stock price over time – its 12 month range goes from $89 to the $133 it hit today – are much more about investor skittishness than underlying performance. Certainly there was nothing in Apple’s last earnings that should have triggered such a significant change in sentiment – they were decent results, but guidance for the next quarter wasn’t great, and as usual there was nothing concrete about the company’s longer-term trajectory from management. I continue to be very bullish on Apple in general, but I certainly don’t base that conclusion on what’s going on with the company’s stock price.
via WSJ
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