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View the article online at http://citywire.co.uk/wealth-manager/article/a653300

Falling Apple's 10% crash threatens tech party

by David Campbell on Jan 24, 2013 at 08:07

Falling Apple's 10% crash threatens tech party

Apple shares fell 10% in afterhours trading last night, threatening to throw a spoke in the recent tech market rally, as its breakneck rate of sales growth faltered at the end of 2012.

Shares in the business gave up around $50 billion as investors began to question whether its period of maximum expansion. Apple stock has fallen from a peak of $702 in September to $461.31.

The company sold a record 47.8 million iPhones over the last quarter of 2012. While 29% up on 2012 that nonetheless disappointed market expectations the company would break through 50 million.

Similarly, while revenue grew 18% over the quarter to $54.5 billion, that nonetheless came below expectation of $54.73 billion, marking the third consecutive quarter that Apple has missed forecasts.  

The slide in Apple’s valuation since September has been a source of fascination to US analyst Bespoke Investment, which this month pointed out there is now spread of more than 30% between the share price and median price target.

Over the last quarter the shares are now lagging by a wide measure the price gain of Facebook – which admittedly started from a much lower valuation.

Apple is now trading at a trailing multiple of 11.64 times price to earnings.

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