View the article online at http://citywire.co.uk/money/article/a638679
Investors see buying opportunity in Apple share dip
The technology giant is being backed to recover its losses with the iPad Mini to perform better than expected.
Apple fans are back out in force believing that with an end to its production and stock issues in sight, and the stock still some 15% off its all-time high, the tech giant is a buying opportunity.
It has been a roller coaster year for Apple both in corporate and stock market terms after the company proved itself able to power on after the death of Steve Jobs.
On the face of it all is well, with its share price up 38.97% year-to-date and the company having paid its first dividend since 1995 back in July.
But this has not been straight line growth, masking the fact the company has issued a profit warning and its share price has suffered two sharp drawdowns this year.
The media frenzy back in April on the possibility of Apple’s share price hitting $1,000 seems somewhat fanciful.
Bullish notes from analysts Brian White of Topeka Capital Markets and Piper Jaffray’s Gene Muster saw both back the firm’s share price to reach four digits, with White predicting by the year-end and Muster by 2014.
This now seems a bit of a distant memory. After suffering a 16% correction during the second quarter, blamed variously on rumours of a cheaper version of the iPad being launched or just a ‘pause for breath’, Apple powered on to reach an all-time high of $702.10 on 19 September.
Roll on six weeks, and lower than expected fourth quarter iPad sales, an underwhelming iPad Mini launch and production problems at Taiwan-based supplier FoxConn led the stock to suffer its worst drawdown of the year. It fell 18.58% on a trailing price/earnings (P/E) basis and the stock hit its lowest point in a decade.
Apple has bounced back from its mid-month lows, up 8.73% from its 15 November bottom, but remains -15.42% down over three months, which Piper Jaffray’s seemingly ever-bullish Muster is calling a buying opportunity.
He points to a marked improvement in the company’s stock of iPhone 5s across different networks ahead of the key holiday season. Improving the availability of the iPhone was a crucial issue holding the firm’s share price back, he said, pointing out that iPhone sales accounted for 53% of Apple’s earnings in the fourth quarter last year.
‘AT&T and Verizon have shown dramatic improvements in availability, while Sprint has maintained consistent availability,’ he said.
‘Our checks indicated that Sprint phones were in stock at 92% of Apple Stores, AT&T was available at 82% of stores and Verizon at 72% of stores. Additionally, we note that wait times for online phone orders dropped to two weeks.’
News sponsored by:
Here at BlackRock, we help investors make more out of commodities with a range of innovative, flexible and resilient investment strategies.
From Brazil and Mexico, to Vietnam and Nigeria, the rapidly developing economies of Latin American and frontier markets, which are some of the smaller, less developed economies in the world, provides investors with a wealth of potential opportunities. Discover why BlackRock's investment trust range is well placed to help you make more of these exciting regions.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the funds
Look up the fund managers
Tools from Citywire Money
From the Forums+ Start a new discussion
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.