Apple Inc (NASDAQ:AAPL) is having another disappointing day on Wall Street today, flirting with the $580 mark for the first time since late July. While the bears will argue that iPhone 5 sales may be below expectations, shares of the tech giant are undervalued at the moment, making now a perfect time to buy on the dip, as traders say. We’ve already covered extensively how some of the world’s most successful money managers love Apple Inc (NASDAQ:AAPL), and believe that the smart money is making the most of the stock’s current selloff.
As we’ve displayed countless times before here on Insider Monkey, empirical studies have proven that individuals who mimic or “monkey,” insiders can beat the market by an average of seven percentage points a year. Using this phenomenon as a rule, it’s easy to see that Apple Inc (NASDAQ:AAPL) is without a doubt the best monkeying candidate at the moment. But don’t take our word for it, the Wall Street Journal’s MarketWatch recently did a special report on Insider Monkey’s Billionaire Hedge Fund Index, and Apple was at the top of their list too.
With that being said, no matter how attractive a stock may appear on paper, there are still near-term headwinds that can derail any potential for positive appreciation. Apple Inc (NASDAQ:AAPL) investors are likely sickened by the company’s Maps fiasco, or the negative publicity that its firing of two key executives earlier this week has received. Like it or not, Apple is the most widely-discussed company on the web today, and it will always be subject to chatter, despite its fundamentally cheap valuation.
Aside from rumors of iPad mini sales being below estimates, the chatter this afternoon is surrounding Apple Inc (NASDAQ:AAPL)’s loss of a key trademark in a Mexican court (18th District Appellate) concerning its “iPhone” brand. The court’s official ruling was that the name of Apple’s smartphone is exactly the same – phonetically speaking – as iFone, a telecom company with operations in Mexico and much of Latin America, in addition to Spain.
Interestingly, Apple Inc (NASDAQ:AAPL) did not own the iPhone trademark in the country when it released the smartphone in 2007, nearly four years after iFone received its trademark. The news comes as a pleasant surprise for iFone, which was originally sued by Apple Inc (NASDAQ:AAPL) in 2009, despite the fact that it held the trademark first. The victor’s legal team said that Apple owed iFone “sanctions up to the amount of 20,000 days of minimum wage,” and “no less than 40% of the sales of iPhone services in Mexico.”
While the former sanction isn’t a substantial amount of money, the latter can be material to Apple Inc (NASDAQ:AAPL). It should be noted that these figures come from iFone, and have not been verified by the tech giant, as of yet. According to its most recent financial statement, though, Apple Inc (NASDAQ:AAPL) made revenues of close to $60 billion in the Americas over the past year. It is unknown exactly how much of this total can be attributed to Mexico specifically, but it can be assumed that roughly half of this total is derived from iPhone sales, given historical norms.
We’ll leave the rest of the speculation up to the reader, but the payments could be significant. In case you were wondering why the stock has been down on Friday in the absence of any product-related news, it’s safe to say that Apple Inc (NASDAQ:AAPL)’s settlement with iFone could be the biggest “bear,” so to speak.
Let us know in the comments section if you think this is substantial to Apple Inc (NASDAQ:AAPL)’s fortunes, at least in terms of its massive multi-billion dollar cash hoard. Check back here for updates in case the company gives an official response.