Apple Inc. (NASDAQ:AAPL) was once an unstoppable dinosaur that surprised the world with its rapid growth. But only one thing that surrounds the company now is “pessimism.” Just two quarters ago, analysts and investors believed that Apple Inc. (NASDAQ:AAPL) can do no wrong, but now they think it’s a company which can never do anything right. Amid all these, CEO Tim Cook is reportedly facing the ouster question.
After touching its all-time high of $705 in September 2012, the stock has fallen to its lowest level since the demise of Steve Jobs in 2011. Now investors are curiously looking for something that will help them decide whether the stock has touched its nadir or it will fall further.
At this year's inaugural London Quality Growth Investor conference, Denis Callioni, analyst and portfolio manager at European investment group Comgest, highlighted one of the top ideas of the Comgest Europe Growth Fund. According to the speaker, the team managing this fund focus on finding companies that have stainable growth trajectories with a proven track record Read More
Know Your Problem
Apple Inc. (NASDAQ:AAPL) has lost about $290 billion in market value since September, which is more than the national GDP of all but 34 countries. But Apple Inc. (NASDAQ:AAPL) management, including Tim Cook, never talked about the matter. The stock wouldn’t fall so much and the pessimism won’t build so heavily if there weren’t a problem. It’s time Tim Cook must assure investors that he is dedicated to boost the stock.
Don’t Sit Idle
Almost all of us know that the second quarter earnings of Apple Inc. (NASDAQ:AAPL) tomorrow will be poor. Analysts polled by Thompson Reuters, expected revenues to rise 8 percent while profits would decline 17 percent. That’s because the company has been doing nothing to assure investors as rivals have started dominating the industry Apple Inc. (NASDAQ:AAPL) created.
The Galaxy S4 from Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) is highly anticipated, Facebook Inc (NASDAQ:FB) is teaming up with Android-based smartphone makers to build Android smartphones, Google Inc. is gearing up with Chromebook which could be a game changer, and Research In Motion Ltd. is about to launch its BlackBerry Q10 model. Despite the fierce competition, Apple Inc. (NASDAQ:AAPL) is just delaying the launch of its own products.
About $150 Billion of Useless Cash
The company has accumulated $150 billion in cash, but that has not been put to any use. Apple Inc. (NASDAQ:AAPL) can raise dividends to woo investors, make some big acquisitions, but the company’s ego prevents it from taking those steps. Look at Google Inc., which has acquired several companies including YouTube, Motorola and Android. Some failed, a few are work in progress and some become blockbusters. Google Inc. invests in the technology and people it lacks. Why can’t Apple Inc. go that way?
Where Are The Upcoming Products?
We have been hearing about Apple TV, iWatch and what not, for almost 3-4 years. Dividends and new acquisitions can definitely boost the stock, but not to the previous highs. Shares can touch those highs again only if Apple Inc. creates a blockbuster new product or an entirely new market, just like what it did by bringing iPhone’s and iPad’s. The truth is, that’s what shareholders are craving for.
Opportunity To Bounce Back
It’s the first time in years that expectations for Apple Inc. (NASDAQ:AAPL)’s quarterly earnings have fallen so low. That may be an opportunity for the company. It the company sets a low bar in tomorrow’s earnings call, it will give the company a chance to do something it hasn’t done in several quarters – surprise the Wall Street with solid upward swing.
Apple Inc. (NASDAQ:AAPL) is still an excellent company with strong product lineup, it has just missed a few steps. By setting a low bar in the second quarter earnings announcement, and then launching exciting new products in the coming months, the company can give its stock a push.
Apple Inc. (NASDAQ:AAPL) shares were up 1.61 percent to $396.81 at 12:49 PM EDT.