AAPL has a huge pile of cash, good dividend yield, high gross margins, and strong growth. Stocks like Amazon break even or lose money. Do investors care whether a company makes money, or is it just a popularity contest? It seems like investors like to put money into pie-in-the-sky companies that might someday turn into the "next big thing" instead of companies with great fundamentals and proven growth potential. Just my 2 cents. It was insane when the market pushed AAPL down to $79 a couple years ago, and this is further insanity. AAPL was one of the few companies still making buttloads of money during the financial collapse, and as the economy improves, they'll do even better.
Stock market is a casino. Apple especially so because of its volatility and volume. a favorite among traders. Further it has weekly options to kick the casino into high gear.
Apple could stop much of this with a substantial buyback and doubling of the dividend. I do not think they care about the stock anymore though. They would rather keep the cash to ensure the company can survive for longer. Poor use of funds and poor financial management. Because of this the traders can romp all over this stock.
You will have to think of yourself as a business owner and over time hope that Apple sees the light and starts sharing its cash hoard with you, the business owner. This means major buybacks and large cash distributions. Their market cap today is now 25% in cash. The largest absolute cash balance of any company in the world. For this the casino rewards them a PE well under the average no growth stock.
Fear not. The negativity and pessimism one day will stop. It could be today, tomorrow, a week, months or several or even years. You just never know over the short term what Mr. Market will give to you. The only game is to own it as a business owner and hope Cook and the board treat you the shareholder well. In the meantime the stock can do anything. It could be 400 next week and it could be 1400 next week. Nobody knows where it is going in the short term.
If you look out further in 3 years they should have about 300/share in cash which today would be 60% of their market cap. This assumes no growth too. If the stock holds todays price the PE will be reduced to 4 ex-cash. If the company was not so big it would already be a buyout candidate, go private or taken out as LBO. Just too big to do that so it gets no takeout premium either.
Fundamentals have nothing to do with stock prices these days or ever for that matter. If you think about it the stock market is just a big ponzy scheme because you're not really buying anything just the right to sell higher (or lower). Once you realize this it all comes into perspective.
Fundamentals do have everything to do with stock price. Fundamentals and proper valuation give stocks a fulcrum on which they swing both higher and lower. Based on this, AAPL is trading at a deep discount and is a screaming buy. You would have to be an idiot to sell or short at this level. In fact you would be an idiot not to be buying at these levels. Thank god there are so many idiots out there making trading this stock and other easy.
Sentiment: Strong Buy