Apple Inc (NASDAQ:AAPL) was soaring through the first nine months of 2012, as its stock price was up more than 70 percent on the year as the iPhone 5 was being launched. But even as the new iPhone set sales records in the first weekend (topping the old sales record by 25 percent), the stock has been on a steady decline in the weeks since, now down about 25 percent from the all-time high of $705 per share. With the new iPhone, i Pad and iPad Mini, there was some talk about Apple perhaps going to $1,000 per share, but yet it’s down at $530. What has happened?
“Someone yelled fire in the theater where the hedge funds were safely booking their year-end profits—and as traders do, they will trample you trying to be first to get to the exit,” said Greenberg Capital’s David Greenberg.
Is that just a simple explanation, year-end profit-taking? Or is there something deeper, having to do with the fundamentals of Apple Inc (NASDAQ:AAPL)?
“The new product aspect has faded recently as the newer versions of their products provide less of a reason to upgrade,” said Stephen Weiss of Short Hills Capital. “While Tim Cook is a capable executive apparently, his background is in procurement and engineering, not innovation. So who is driving this?”
Another issue, which was mentioned by other analysts in recent days, may be the pool of investors changing as expectations of growth by 25 percent or more could be going by the wayside for Apple Inc (AAPL). “We believe that Apple is transitioning from a hyper-growth story to a more traditional, high-quality branded company story,” said Toni Sacconaghi of Bernstein Research.
“Apple was the classic case of no more incremental buyers of the stock,” said Enis Taner of RiskReversal.com. “No matter how bullish a story, you need new buyers of the stock each and every day, or it will go down. Simply put: Apple has run out of them.”
How do you see Apple Inc (NASDAQ:AAPL)? Is it still a growth stock, or is it truly moving into blue-chip territory? How do you think of it as you invest? Would your perspective on the company change one way or the other? Does the stock currently reflect Apple Inc (NASDAQ:AAPL)? Is it growth or blue-chip to someone like billionaire David Tepper of Appaloosa Management LP? We’d love your feedback!