Move over Bitcoins and gold, Apple (AAPL) is the latest investment to succumb to panic selling.
Shares of Apple plunged as much as 6% Wednesday afternoon and hit a new 52-week low of $398.11 in the process. Shares recovered a bit as the day wore on and closed just under the $403 mark. But Apple's stock is now down almost 25% this year and is more than 40% below the all-time high it hit just last September.
Apple has been a hated stock all year, but why did it completely fall apart on Wednesday? The catalyst appears to be a weak sales outlook from chip company Cirrus Logic after the closing bell Tuesday. Cirrus is a key supplier to Apple. Its audio chips are used in the latest iterations of the iPhone and iPad mini. Shares of Cirrus (CRUS) plunged nearly 14% on the news.
So is the bear run in Apple finally nearing an end stage? Apple's earnings don't come out until April 23. So we may not know the answer until then. But traders on StockTwits had plenty to say about the iPhlop.
It seems safe to say that investors now have extremely low expectations for Apple when it reports results. Wall Street's consensus earnings estimate for Apple three months ago was for a profit of $11.86 a share. The current estimate is now $10.13. That's a nearly 15% drop.
As for that $137 billion in cash ... a number that could very well exceed $150 billion once Apple reports next week ... maybe CEO Tim Cook will throw a bone to angry shareholders and boost Apple's dividend. But as Fortune's Apple blogger Phillip Elmer-DeWitt points out, the dividend yield has already been rising sharply. Of course, it's for the wrong reasons. Investors don't like to see a higher yield just because the denominator in the equation (the stock price) is going down.
One trader joked that Apple would be better off as a boring company as opposed to a leader in the dynamic, but volatile, world of consumer tech.
Ha! Not so sure about the steel and coal. But Coca-Cola (KO) has definitely been a much better stock than Apple lately even though its fundamentals are hardly exciting.
Other investors noted that Apple may finally have tougher competition in the smartphone business. Two formerly left for dead hardware companies have made a bit of a comeback lately.
Nokia (NOK) has won praise from some for its new line of Lumia phones that run on Microsoft's (MSFT) mobile operating system. But let's be honest here. Nokia is no Apple. Analysts are still predicting a big drop in sales and a quarterly loss. As for BlackBerry? There have been conflicting reports about how well the company's new Z10 smartphone has been selling. The jury is still out on BlackBerry (BBRY).
But Apple does have two legitimately formidable opponents: Samsung and Google (GOOG). The Galaxy S4, which runs on Google' s Android operating system, seems to be the cool kid phone of the moment.
Still, there were a few (but not many) Apple fans sticking with the stock.
It is astonishing. Apple now trades for just 9 times earnings estimates. And here's the really crazy thing. Microsoft and Intel (INTC) have pulled back lately because investors are worried that people are no longer buying as many HP (HPQ) and Dell (DELL) computers. The future is in tablets. So how does Apple not benefit from that?
But it's hard to fight momentum. And one trader brought up another downtrodden stock .. which also has an Apple connection.
Ouch. To be fair to Apple, it's not losing money and needing to raise cash like J.C. Penney (JCP). But now that the whole CEO thing didn't work out, maybe Ron Johnson can come back and save Apple? Or not.
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