What goes up, must come down. After Apple went up, both Apple and APPL came down. Like hungry wolves stalking a limping doe, critics, foes and haters, anti-Apple nattering nabobs of negativism, and most members of the technorati elite politburo took delight in Apple’s recent guidance adjustment, the drop in revenue, and even weaker guidance for this quarter.
Bad news, right?
So, why are so many people buying Apple stock? What do they know that the aforementioned members of the anti-Apple contingent do not? Wait a minute. Who is buying Apple stock?
There are certain basics about the stock market that we need to remember. The first one is easy. Buy low and sell high. One axiom of trading that many critics fail to remember– and never mentioned while APPL fell from its $1-trillion perch– is that for every stock sold, there is a buyer.
What do Apple stock buyers know that critics and the rest of us don’t know?
I mean, Apple is a very profitable and rich company that buys back stock, hands out undeserved dividends, and does what it can to appease shareholders and prop up APPL– which does nothing to benefit the company.
Who is buying Apple stock and why?
Savvy investors who pay less attention to the emotional herd mentality of critics, naysayers, and shareholders who scurry into the bushes at the first sign of rain are the ones who buy stock when it falls; and especially so from companies that have sounds financials.
Apple’s numbers, even as much of the world teeters on the beginnings of a recession, are stellar.
Guesstimators who do analysis for a living:
Beautiful the results and outlook were not.
Is that an understatement? Apple was on track before the recent quarter to deliver its best revenue and profits ever. Then along came China. The “R” word. Apple had to resort to promotions and bundles and packages and worked closely with retailers to move product out the door.
In the end, the company missed iPhone unit sales by about 15-percent. That’s a big dip and would have dented the quarterly financials more if Apple was not so diversified.
Mac, iPad, Watch, and Services were up. I know, right? Go figure.
Apple executives offered guidance for the current quarter less than analysts had expected, but not much, so all is good; the stock price is on the rebound, profits continue to pour in from every corner, so, ipso facto and alakazam…
Meh. Move along. Nothing to see here.
The good news is what Apple’s best investors follow. Revenue is strong, profits are strong, margins are strong, the product line is diversified, and nearly 1-billion iPhones are in the market today, and some of them will need to upgrade soon.
Shrewd investors buy low and sell high.