The price of the stock of Apple has dropped from a high of $702 in September 2012 to only $445 two days ago (January 25, 2013). The Apple of many investors’ eyes had given them the black eyes recently. Is there any justification for such precipitous decline in investors’ confidence in the stock’s performance? Hardly any, for the following reasons:
1. Apple’s immaculate brand name is still largely intact. A great deal of goodwill has been built up through the decade-long innovations spearheaded by the late Steve Jobs. Loyalty to the brand should not be underestimated. Competitors like Samsung maybe making lots of smart phones, giving Apple a run for its money, but despite their recent success, they are still imitators, while Apple remains the originator and innovator.
2. Both the technical and marketing infrastructures of Apple have a solid foundation, ready to break new grounds. Apple has already amassed not only financial capital, but human capital as well. It has attracted the brightest talents in the field. The machinery of innovation cannot be built quickly enough by its competitors to out- maneuver Apple in terms of development of new technology and innovative applications.
3. The market for Apple’s products is still fast expanding globally. In China alone, the appetite for Apple’s gadgets seems insatiable. The Chinese consumers are getting wealthier by the day and Apple’s products will be more affordable to more and more people. Other emerging markets will soon follow. Apple’s is also on the verge of inking a deal with China Mobile, the largest telecom company in China, which should jettison the sales of iPhones substantially.
4. Plenty of new products are being designed and developed in the pipeline and Apple TV is only one of them. Apple will take the lead as usual, leaving its competitors in the dust, trying to play the catch-up game. Due to the ecosystem that Apple has so successfully created, it will be exceedingly difficult for its competitors to imitate.
5. Apple’s strong cash position should enable it to do many great things. Its current challenges may be its inability to manufacture products fast enough to meet the demands. Downstream suppliers have to be able to adapt to Apple’s heady growth.
Fundamentally, the company is on very sound footing. Incredulous investors saw any slowdown, no matter how insignificant in the grand scheme of things, as signs of weakness. Such unfounded fears may have accounted for the recent dumping of the stocks by so many. Unfortunately for them, the stock price of Apple may soon resume its meteoric rise.
Aside from analyzing all the fundamentals, I also calculated the fortune of Apple based on the I Ching principles. I strongly believe the luck of the company is about to change from negative to positive, and strong up trend will continue to the end of July of this year.