Neil Hughes
Investment managers on Wall Street believe that Apple stock is currently undervalued, but they're also reportedly concerned that shares of the company could drop even further before their eventual rebound.
Portfolio managers interviewed by the Financial Times indicated that investors remain nervous about Apple's future prospects in China, as well as the anticipated launch of the "iPhone 6s." Even with those concerns, fund managers concede that Apple is trading at a discount when compared to the rest of the market.
Those managers are still waiting, however, over concerns that shares of Apple could continue to dip heading into the debut of the next iPhone. There is a fear that despite the company's recent slide, it may not have yet bottomed out.
Accordingly, most investment banks on Wall Street tracked by AppleInsider continue to advise that investors buy in. In recent weeks, a number of firms have reiterated their price targets and "buy" recommendations, including Macquarie Securities, RBC Capital Markets, FBR Capital Markets, and UBS.
Apple did receive one high-profile downgrade earlier this month, however, when Bank of America Merrill Lynch reassessed the company's stock to "neutral."
Shares of Apple have continued to slide since the company's June quarter results, which fell short of the market's lofty expectations even though they were a new record for the iPhone maker. There has also been concern that the Chinese market could prove soft for Apple, especially in the face of low-cost competitors like Xiaomi and Huawei.
Apple, however, remains bullish, not only for future iPhone growth, but also for its near future in China.
Apple Chief Executive Tim Cook noted during his company's last quarterly earnings report that his company still saw 90 percent growth in China last quarter. And worldwide, just 27 percent of the iPhone installed base has upgraded to the latest generation iPhone 6 series.
"We view that as a very bullish sign on the future, and there's a lot of headroom left for upgraders," Cook said, not so subtly suggesting that the anticipated "iPhone 6s" series has plenty of growth opportunities.
Andrew Orr
Wesley Hilliard
Malcolm Owen
Christine McKee
William Gallagher
45 Comments
All it means is my Apple dividend payment buys shares at a lower price and I get even more shares. I just happen to think the glass is half full type.
You mean the same fund managers who consistently perform worse than passive index funds? They don't know what the hell they're talking about.
Neat. Well, AAPL is up 2.65% so far today.
There has also been concern that the Chinese market could prove soft for Apple, especially in the face of low-cost competitors like Xiaomi and Huawei.
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Completely ignoring the "status symbol" nature of iPhone purchases in China.
Someone who has the disposable income to buy an iPhone in communist china really doesn't care that Xiaomi and Huawei make cheaper, shittier Android phones loaded with malware.
BMW and Kia do not serve the same markets.
Even if Xiaomi and Huawei OWN the mid-price/low-price end, their margins are razor-thin, so who even cares?
While I am bullish on Apple, I also tend to agree that there is risk that Apple will linger in the 100-115 range until October. I have my price that I am willing to buy more shares, but since I have too much of my portfolio in Apple as it is now, I feel that any additional investment needs to be at "can't pass up" prices. The marginal gains vs the risk just doesn't warrant it *for me*. But, if you are a young investor with some money saved up, it offers a great entry point into the market to build long-term wealth. If you have $1,200, buy 10 shares. If you have more money and can save $10-15k over the next 12 months, consider buying 2 or more options contracts that are deep in the money (strike price of $60-80) and expire more than 12 months out. Before they expire, sell what you can't afford to execute for whatever gains you have made. The latter is a fairly low-risk investment which should give you a 20% gain in a couple months, and if you are lucky you will double your money by January. But, taking investment advice from anyone on the Internet is not really a great idea.