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Is Apple Stock Cooked?

This week, we saw a flurry of bad news for Apple (NASDAQ:AAPL). There was trouble at a Foxconn facility, reports of “disappointing” iPhone 5 sales, the ongoing black eye over replacing Google‘s (NASDAQ:GOOG) map app with its own and general fear that the stock has run too far now that it’s around the $700 mark and up about 70% on the year.

And that’s to say nothing of the broader macroeconomic environment presenting big challenges for every company these days, including the tech giant that Steve Jobs built. Geopolitical unrest in the Middle East, high unemployment in the U.S., continued debt trouble in Europe … it’s enough to weigh on any company, and Apple stock is not immune.

So is Apple stock cooked? Is the run over?

No way.

Lots of grumpiness is out there, yes, but a lot of it is illogical or hysterical. Just look at how crazy things have become with this Joe Nocera column from The New York Times as an example. Here’s his hyperbolic closer, a dig at the rather sloppy replacement for Google’s much-loved mapping software:

“Oh my god,” read one Twitter message I saw. “Apple maps is the worst ever. It is like using MapQuest on a BlackBerry.”

MapQuest and BlackBerry.

Exactly.

Wait, what? Are you really saying Apple is going the way of Research In Motion (NASDAQ:RIMM)? Please.

Earlier, Nocera made comparisons to fallen tech giant Microsoft (NASDAQ:MSFT) as well. But come on, Joe, are we really going there? Next you’ll tell me that Apple is like Kodak or Borders just for dramatic affect.

Apple isn’t going anywhere, people. Yes, there are real risks involved with this company, as with any investment. But Apple stock should at the very least remain firm and has very good chances of moving higher in the months ahead.

To quell the naysayers, let’s first tackle some of the recent negativity.

  • iPhone 5 launch: Apple sold 5 million iPhone 5s in the first weekend. At $600 a pop (unsubsidized) that’s $3 billion dollars. With a B. Still, some forecasters were looking for as much as 6 million units sold, and some even 7 million. So, the iPhone 5 launch was branded a “disappointment.” That’s a stretch. And it’s even more of a stretch to start tossing around words like “failure.”
  • Margin squeeze: Though I’m dismissive of the launch criticism, it’s worth noting that the iPhone is tremendously important to Apple’s balance sheet, and even a small variation in this one item can result in trouble for the tech giant. Though Apple has around a 9% smartphone market share globally, it sucks up 75% of the global profits, thanks to its high-margin iPhone. It’s impossible to make up a sales shortfall with other items, because the margins aren’t there. This is a serious concern going forward, to be sure.
  • Trouble in China: Subsidies are the big way Apple gets its profits so robust in the U.S. — with Verizon (NYSE:VZ), Sprint (NYSE:S) and AT&T (NYSE:T) offering iPhones for $200 or so to consumers and picking up the balance of a roughly $600 tab. China has big growth potential for Apple, yes … but a lack of subsidies means the newest iPhone model is cost-prohibitive for many. Thus, it has just a 7.5% market share in China.
  • iOS 6 and the map mayhem: Yes, the lack of Google maps is painful. But the reality is that Android phones are the only real competition for Apple, so its partnership with Google had to taper off eventually. While the map downgrade is a bit of an embarrassment, in the greater scheme of things I liken this to “antennagate” with the iPhone 4, which faded to nothing after just few weeks.
  • Foxconn trouble: The Apple supply chain appears to have suffered no lasting disruption over worker unrest. And besides, the initial shipments of the iPhone were already on their way, so it shouldn’t gum up early sales, in my opinion. If anything, a mild scarcity may increase the sex appeal of the iPhone 5 in its early days.

In short, these problems are not doomsday signals for Apple. Many — if not all of them — are manageable.

And when you look at the forward P/E of 13, the recent dividend payments, the $27.7 billion in cash and short-term investments, and another $89.6 billion in long-term investments … Apple stock doesn’t exactly look like it’s a goner.

So, while folks like Joe Nocera may find success trolling for clicks with a bearish article on Apple stock, they certainly won’t score if they put their money where their mouth is and bet against the company.

I’m sticking with Apple stock. You should, too.

Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at editor@investorplace.com or follow him on Twitter via@JeffReevesIP. As of this writing, he owned a long position in Apple.

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