Saturday, February 1, 2014
One of the most popular blue-chip stocks in the world is getting hammered...
Consumer-electronics giant Apple has fallen 10% since the company reported earnings last week that disappointed investors.
For the first fiscal quarter, Apple announced flat earnings of $13.1 billion. (Earnings per share were up 5% due to share repurchases.) Revenue grew 5.7% to $57.6 billion. Meanwhile, the company broke iPad and iPhone single-quarter sales records.
You may wonder why a company that reported record sales and grew its top line is being punished. Wall Street is all about expectations and predicting what a company will do every quarter. And Wall Street wanted Apple to sell more iPhones...
Apple reported it sold 51 million iPhones in the first quarter, up 7% from the same period a year ago. Analysts expected Apple to sell 55 million units. The company also said revenue in the current quarter could come in below analysts' expectations.
Is Apple – which trades for less than six times earnings after subtracting its $155 billion cash hoard – really worth 10% less than before its announcement?
Billionaire investor Carl Icahn, who owned $3.6 billion of Apple stock before Tuesday, announced he purchased an additional $500 million of stock. Icahn disclosed his position through the social-networking website Twitter, adding, "My buying seems to be going neck-and-neck with Apple's buyback program, but [I] hope they win that race."
Icahn is urging the company to use its massive amount of cash to buy back more shares.
Icahn also told
The main headline on Yahoo Finance this week read "New Apple Looks Like the Old Microsoft" – suggesting the company is stodgy and old. It's ridiculous...
In the November issue of Extreme Value, Dan Ferris raised his "buy up to" price on Apple. Here's what he wrote at the time...
Dan e-mailed me last week to say there was "lots of good news" in Apple's announcement. He said the market's reaction was "silly."
He noted the bullish portions of Apple's conference call. Among them:
Apple shares fell to less than $500 this week. It looks like we may be setting a floor in the stock.
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Last week, we launched our newest addition to the Stansberry Radio family... The James Altucher Show. And thanks to you, we currently hold the No. 1 spot for investing podcasts on iTunes.
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For his second episode – out yesterday – James talked to author Gary Vaynerchuk. Vaynerchuk was an "F" student growing up. Today, he's a New York Times bestselling author... And he's reportedly worth more than $10 million.
James already has several excellent guests lined up for his show (including Freakonomics co-author Stephen Dubner and New York Observer editor Ken Kurson, who formerly headed Rudy Giuliani's presidential campaign).
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Editor's note: The Weekend Edition is pulled from the daily S&A Digest. Our new James Altucher Show will feature the most controversial topics... the smartest and most successful guests... and the best business insight in the world. To sign up to receive these podcasts completely free of charge, click here and subscribe on iTunes.
Date Range:1/23/2014 to 1/30/2014
Date Range:1/23/2014 to 1/30/2014