Apple’s stock has been getting slammed hard lately, down over 20% from its high point in September. Today, the stock took yet another beating, sliding well over 6 percent in a single trading day. What’s going on with Apple’s stock, and should investors be concerned?
There are a number of theories about why the stock saw such a sharp decline – including that investors are worried about Capital Gains tax, and that sales of older iPhones are eating away at iPhone 5 sales.
Pipar Jaffray analyst Gene Munster shares some of his theories (via Forbes):
- There’s a Digitimes article this morning that suggests comments from wireless chipset providers point to upside to Street estimates of 43-45 million iPhones for the December quarter – but a 20% sequential drop in demand for parts for the March quarter. “We believe this 20% decline is to be expected coming off of a launch quarter and do not believe it is an indication of how units might trend in March,” he writes. “As an example, if Apple ordered 52 million iPhones from the channel in December and 48 million are sold, that implies a 4 million unit channel fill and 41.5 million units ordered from Apple in March. That would mean 44.5 million units would be available for sale in March, which would mean our 43 million iPhone estimate for March is well within the range of probability.”
- Technicals: “Apple’s simple 50 day moving average is nearing its 200 day moving average, which is a negative technical sign.”
- The margin requirement thing. “While we don’t know what percentage of AAPL shares are on bought on margin, we do not believe the requirement change has anything to do with the fundamental health of AAPL.”
- Nokia getting a deal with China Mobile (which I noted earlier): ”We believe some investors have speculated that China Mobile will carry the Lumia instead of the iPhone. We do not believe this is true and note that China Mobile already carries multiple smartphones from multiple vendors. We continue to expect China Mobile to add the iPhone in the back half of 2013.”
UBS analyst Steve Milunovich also shares some ideas (again, via Forbes), suggesting that sales growth of the iPhone has fallen below expectation. He also suggests iPhone sales may have been affected by Hurricane Sandy. But that still doesn’t account for a 6% drop in a single day. Unfortuantely, getting the real truth would involve reading investors’ minds, which is of course impossible.
What about you – should investors be worried? Or is now a better time than ever to buy into AAPL while it’s undervalued?