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Another Lackluster Apple Event, Another AAPL Slide

I’ll admit that as an Apple (NASDAQ:AAPL) shareholder looking for a way out, I had naïve hopes that today’s event would bring a catalyst to the stock — like a significant dividend bump, since Apple could increase its distributions by 20% and still only be paying out 25% of future earnings. It would put the AAPL dividend yield at 2.8%, which isn’t burning down the house … but at least it would be something.

Unfortunately, the meeting provided no fireworks. There was no dividend announcement of any kind. There was no stock split as Doug Kass hinted at on Twitter. There was no big reveal, no vitriol over the Einhorn lawsuit

No nothin’, really.

Tim Cook tried to be sympathetic to shareholders in the latest meeting, saying “I don’t like it either” in regards to the stock’s drop. But as for ways to counteract that trend, he had zero insights to offer.

Cook said “What we’re focused on is the long term” (as usual), that there’s “great stuff coming” without any details (as usual) and that “Winning for us is not making the most. We want to make the best.” (as usual).

I’ll state the obvious now: Business as usual is decidedly uninspiring, given the recent headwinds for Apple stock. The risks to Apple are obvious, so I won’t spend too much time rehashing. In a nutshell, they seem to be:

  • Falling margins as Google (NASDAQ:GOOG) Android-powered devices from Samsung (PINK:SSNLF) and others compete on quality at a lower price.
  • Continued trouble to capitalize on enterprise.
  • Supply chain issues.
  • A general sense among investors that innovation is waning and there’s no “next big thing.”

I do not think Apple will evaporate, but I am done watching this movie. I’m not sure what’s left to look forward to other than the nebulous idea that something “insanely great” this way comes … eventually.

I have officially reached max pain, but at least I’m at my cost basis, so I can get out without losing anything other than time and a lot of hot air spewed on the topic.

I mean, Microsoft (NASDAQ:MSFT) is winning over teens, for cripes sake, with its Surface now appearing cooler than the iPad. If that’s not a harbinger of the apocalypse, it’s at worst a contrarian sign for AAPL stock.

Sure, Apple has potential in China … but it remains painfully behind in market share, and a lack of subsidies and a push to the low end remains a bad scene for margins.

So my two cents after all of this is that nothing will change in the near-term — and given the fact that I think the market’s current consolidation is a springboard to bigger things, I’m officially outta here. Today, I’m placing a good-to-cancel order for Apple stock at $450 — roughly breakeven on my trade — and heading for the exits for better opportunities.

Maybe my negativity is a sign that now could be a great time to buy … but I’m committed.

If you disagree, by all means be my counterparty on this trade.

Related Reading

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 position in Apple … but not for long.

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Comments
  • Flexcob

    I bought Apple @$8.00, who cares where it is now!

    • EdKent

      Have you not sold any? What are you holding for? Is it just until you need it for retirement then you cash out? Everyone has there own incentives and not being critical at all. I know many you sold then regretted it too. While some must sell because they aren’t in it to wait long. Lots of reasons.

    • Dan

      Who cares? Those who didn’t buy at $8.

    • Al

      Dont be a troll

  • PSST

    all these blogs about apple is pure crap.
    it make good devices & makes a pofit. what do investors want?
    the more it goes down the more i buy.

    • Dan

      And the more money you will lose. Market always looks forward and I am seeing a lot serious competition out there and little innovation.

      • http://twitter.com/iAppTweet App Tweets

        Is any other competing company innovating?

        • Get Mad, Fanboy

          Nope, not really.

          Some may argue Google or Samsung, but Google is a software company, and Samsung waits for Apple innovations to copy.

        • my10cents

          MSFT! but iFanboys and Chromeheads won’t give it any love because it isn’t AAPL or GOOG so it can’t be any good.

        • http://www.facebook.com/profile.php?id=100004971248393 Greg Berrera

          I went over to a client’s house to check up their network settings, man, the client had windows 8 installed. wtf is that shiet…i know now that my next computer will NOT be a windows. Sry, MS, you lost me at “where are all the programs at”

        • Dan

          Not trying to say the competition is superior so no need to get defensive. I’m just saying the competition is now a real threat and apple is loosing its cool factor which investors see as a potential threat to its future margins….hence the stock price.

      • http://twitter.com/BongBong BongBong

        Where is the “serious competition”? The ONLY company making money with Android is Samsung and they make a beggar’s profit compared to Apple. Also, Google is very concerned about Samsung’s stranglehold on all profits on Andoid going to them because if they decide to fork Android, then Google is… forked!

      • the Ugly Truth

        If the market really looks forward, why was AAPL trading in the low teens PE post 2007/8?

        • Dan

          That was different. The market was predicting a potential depression which was averted, fortunately. People were selling every stock in their portfolio. The market is now up and the Dow is climbing rapidly while apple has been tanking relative to the indexes. This is because shareholders extrapolate based on what little recent innovation they have seen. Sure, if Apple releases something where they could obtain huge margins, the shares will roar back up. That something will have to be similar to the iphone when it was first released. That is the big gamble. I have no doubt the Stock will continue its decline so long as they continue to upgrade their current line. Like Microsoft their shares will stink but profits will be great.

          • the Ugly Truth

            If “that” was “different”; today is also “different”…and tomorrow could also be “different”.

            I am not arguing about the “lack of competition”; competition will ALWAYS be present if there is money to be made.

            To say that the market can “look forward” this time but it couldn’t last time because things were “different” is an exercise in fallacy.

            RE: MSFT
            When did MSFT ever had the EPS, CF, and/or rev CAGR of AAPL during the past 5 years?

          • Dan

            Let me rephrase….”that” 2008/09 was a systemic market-wide crash where everything was falling, “this” is only Apple related as the rest of the market has been going up over the past 6 months. These ratios you are talking about are all backward looking based on Apple’s past and current products. If the margins fall, profit falls all these ratios will change very quickly. The market is pricing apple not based on today’s EPS but what investors believe will happen to profits in the future.

  • gsmith

    I bought it at 35 cents.

    • EdKent

      Have you not sold any? What are you holding for? Is it just until you need it for retirement than you cash out? Everyone has there own incentives and not being critical at all. I know many you sold then regretted it too. While some must sell because they aren’t in it to wait long. Lots of reasons.

    • http://twitter.com/BongBong BongBong

      Boy, good for you. I hope you had the foresight to buy a couple thousand shares at the time.

  • EHamid

    I lost half of my capital on this piece of s***t cause I bought @ over 600. So half of my retirement has evaporated. I wonder if there some investors out to join in a class action suit.

    • the truth

      Yes, that’s the solution. Blame other people for your stupidity.

      This is why the baby boomers are RUINING the world. They never are able to swallow responsibility.

    • http://www.facebook.com/matthew.russell.3367 Matthew Russell

      ya… if you gonna take your life savings and bet it all on a single hail mary pass, you’re gonna have a bad time. Plus tech stocks are so fickle; Retirement savings should be defensive, so you insist on equities, you should be getting stable mature companies with long histories of profitability and steady single digit growth. examples: GIS, PG, KO, MCD (although mcd is a little pricier now at 17.8 p/e). Anyway… if i had a time machine I would send this to you 6 months ago. live and learn.

    • http://www.facebook.com/profile.php?id=100004971248393 Greg Berrera

      you got greedy, played by wallstreet, followed the sheep/herd mentality, and when the stock fell you cried. That just tells us that A). You didn’t buy the stock thinking this company would be fine 4-5 years out otherwise if it fell, you should be able to ignore all the noise knowing this investment should be good in the long run B). You bought because everyone was praising it and you went along –a definite NONO, Just like how all the sheeple buying into GOOG right now will get slaughtered C). You don’t have the intestinal fortitude to suck it up D). You’re just plainly unsuited to be an investor E). A smart person wouldn’t put all their eggs in one basket, there’s a term for that: “GAMBLING” F). If you did put all your eggs in one basket, there’s a term called hedging, and you do that by buying out of the money put options in case sh*t like this do happen. So I’m just saying, stop crying, and be patient. Apple is a good company. Steve Jobs ain’t no dumb person who would leave this world and not devise a clear out strategy. A guy like him is a 30 year forward thinker. Watch the Lost Interview of Steve Jobs to get what I mean.

    • Some Guy

      I suspect you are lying and just trying to be provocative. However, in case you are not, I too lost a third my worth on Apple in 2008 when it went from $190 down to $80 in 6 months. Now, one should never have all their eggs in one basket, but it my case, this one egg just grew so fast that it suddenly was a large part of the basket.

      But, I knew the troubles had nothing to do with Apple’s business model, so I hung on, and I’ve made 400% since then (peaking at 700% in September).

      The bottom line is that Apple is at a P/E of 10 and Microsoft is at 15. Is Microsoft really more likely to innovate and capture market share than Apple in the next year or two? Really? No, there is something amiss with the market. Apple will rebound. Maybe not to $700 very soon, but it’ll start trending up eventually.

    • gjgustav

      Ever heard of diversification? Or risk? Why do you think investing in stocks is guaranteed?

    • http://twitter.com/BongBong BongBong

      I’ve made my share of dumb trades. Thankfully the good ones outnumber the bad ones, but I take full responsibility for my mistakes.

    • the Ugly Truth

      Ugly can be fixed; stoopid can’t.

    • Eileen

      Stock goes up and down. There are no grounds to sue anybody. AAPL has done nothing fraudulent.

    • Eileen

      BTW I have learned never, ever to bet against Apple in the long run.

  • Some Guy

    Why do all these writers go on and on that Apple hasn’t innovated lately? Apple has made a ground shifting innovative product only every 5 or 10 years.

    1976 Apple I
    1984 Mac
    2001 iPod
    2007 iPhone
    2010 iPad

    Why would anyone expect something huge anytime soon? They will make something really great, but not necessarily next month.

    • Notreally

      Not really true.. the ipod (touch was the last real innovation).. The iphone is a ipod touch that can make calls, the ipad is just a different form factor of the ipod touch/iphone…. a 2006 ipod touch looks pretty much the same interface etc as a current gen iphone…. where is the innovation at aside from form factors and that they are “cool”

      • Some Guy

        I wouldn’t entirely disagree, but it makes the argument stronger that people’s are now disappointed because their expectations were too high. Though, while the iPad is just a big iPhone, it did make a huge impact on how people used technology. This is why I added the “ground shifting” in my comment. If we were only to talk about innovation, then I’d’ve mentioned the Newton, and much more.

      • http://twitter.com/snookasnoo Idon’t Know

        Jesus..another idiot.

      • thefinite

        Um. There was no 2006 iPod Touch. The iPhone came first.

        http://www.apple.com/pr/products/ipodhistory/

        Trying to diminish the importance of Apple’s accomplishments doesn’t work when you revise history to do it.

    • DrDoppio

      I’m sure Apple will be once again on top when they bring Steve Jobs back on board. We’ve seen it happen before.

    • Baz

      1976 – The Apple I was innovative.

      1984 – The Mac o/s featured a ripped off operating system – and nearly 30 years later the Mac still has a tiny pc user base.

      2001 – iPod – beautiful thing, but not the first – it’s design was innovative, it’s idea wasn’t.

      2007 – iPhone – see above

      2007 – AppleTV – niche product

      2010 – iPad – not quite the first, and certainly beautiful

      2013 – iWatch – niche product

      2014 – iTV – Overpriced, and a niche product

      The ONLY thing Apple have innovated on was their original Apple and iOS – everything else existed in one shape or another.

      I can GUARANTEE that Apple will be working more on a brand new operating system than a seriously innovative piece of tech, because a brand new os will completely refresh the brand. With a brand new iOS then can launch versions of iPhone/iPad etc which are in effect brand new. Makes sense to me.

      • http://twitter.com/thurfjell Mattias Thurfjell

        “…everything else existed in one shape or another.”

        So… basically “innovation” is making something no one has made before? Like a triangular tablet or dictation by farts? Those would certainly be innovative!

        No, innovation is NOT necessarily coming up with one brand new technology, but merging existing technologies – perhaps with new ones – in new, unexpected and interesting ways. Doing that is one of Apple’s core strengths.

      • Majipoor

        You clearly don’t understand what innovation is.

        And I’m sure you said in 2007 and 2010 that the iPhone without its physical keyboard and the iPad or “big iPod Touch” was niche products as well.

        • Baz

          If I don’t understand what innovation is then you clearly don’t know how to read posts properly. The iPhone was not the first touchscreen phone, the LG Prada was, and I never said the ipod or ipad where niche products either.
          What I did say was iOS was innovative. Now lets not have an argument eh :)

          • Majipoor

            You say that the iWatch and iTV are niche products: many (including you?) did say in 2007 and 2010 that the iPhone and iPad would not be successful. You know how wrong they were? But you apparently think it is wise to assume that (rumored) future Apple products will be niche products without knowing anything about those products.

            And FYI, innovation is not being the first at introducing any new piece of technology in a random product.

            I guess you think Google is inovating with Google Glass while it is merely a technological concept.

            When you have as much money as Google or any big company, it is easy to take any new technology from labs and create a “demo” product using this technology while you know it is not ready for mass market. Apple never do that because they always create products for the mass and wait until the technology is ready for this market: creating an actual product for the mass using a new technology *IS* innovation. Innovation imply that you are able to actually produce and sell the technology to everybody.

            The Ford Model T was not the first car, but it was the actual innovation because it was the first car for the mass.

      • http://www.facebook.com/people/Koen-van-Hees/1301049198 Koen van Hees

        Yes, you can GUARANTEE. I don’t think that word means what YOU think it means…

    • OgilvyTheAstronomer

      Hey, but since then, Apple’s competitors have invented the “slightly larger screen”, the pinnacle of innovation!

  • DrDoppio

    A very honest and entertaining analysis. Thanks for the laughs.

  • http://twitter.com/Yogi Jonas

    It was a fucking shareholder meeting, not an “event”

    • http://twitter.com/DumaStudetto Duma Studetto

      How is a shareholder meeting not an “event”? It was a thing that happened, and it was of some importance to shareholders.

      • studuncan
      • http://profiles.google.com/jump2top Hakan KIRKAN

        I do not agree with Jeff Reeves’ opinion as an AAPL stock holder. Calling shareholders’ meeting is not wrong but too general, and sounds so cheesy on the title. It is like calling a wedding ceremony an event on your wedding invitation. “I would like to invite you to our event……..” lol

      • http://twitter.com/snookasnoo Idon’t Know

        Read the article before commenting so you don’t sound so stupid. Like the jackass who wrote this “article”.

    • http://www.guidingtech.com/ Alvaro Bernedo

      Exactly, but sadly the words “Lackluster Apple Event” bring a lot more traffic than “Usual Shareholder Meeting”.

      What a great example of “Don’t let the facts ruin a good headline” right?

  • gjgustav

    So many things to laugh about:

    1. That MS is now cool with the teens. No it isn’t, the article he links to references a poor study that doesn’t bear out with sales statistics.

    2. That he thinks this was an Apple “Event.”

    3. That he thinks a Apple should do things because rumors say so. (e.g. stock split)

    If anyone wants to know why Apple’s stock is down, it’s because “analysts” like Mr. Reeves will take any chance they get to spin Apple news as negative. This, in spite of the fact, that Apple’s revenues, sales, and profit margins continue to be high and outpace their competitors. Amazon makes almost no profits, MS makes less sales and profits, Dell is buying back their shares to avoid reporting their losses, but yet analysts are always more upbeat on them.

    Sorry, but I’m going with the facts; that Apple continues to be successful where it counts: sales and profits.

  • StonehamMel

    This article was written by someone who – up front – admits he was looking to exit the stock. What would you expect from such a writer?

    I bought in at 321 and 394, sold the 394 tranche at 648, and a bit more in the mid-550s on the way down.

    Apple is just as sound today as before the iPad, before the iPhone – both of which were basically trashed at launch. It’s got a ton of cash. Shareholders may come and go. The smart ones will stay.

    About 20 years ago, I was walking through an orthopedic implant company’s offices, and saw a guy in an office – no title on the door, just his name, and a white board covered with diagrams and calculations. I never saw him in any meeting.

    What does he do? I asked.

    “A few years ago, he came up with a product that made hundreds of millions of dollars for us. Then, a year ago, he came up with another that looks like another winner. My job includes making sure no one interferes with him.”

    Scale that up dozens of times, and that’s what I want Tim Cook to focus on – not managing stock price.

  • http://www.facebook.com/bob.malin Bob Malin

    Apple is like the New England Patriots…you expect them to win the Super Bowl every year…when they don’t, it’s “I’m running for the exits…” I’ve been loyal to Apple and they’ve paid me back….3 times over.

  • http://twitter.com/snookasnoo Idon’t Know

    What an idiotic article. Who is this fool..besides a linkbait whore…it was a shareholder meeting moron, new products are not annoucned at shareholder meetings.

  • http://twitter.com/snookasnoo Idon’t Know

    Apple makes 70% of smartphone profits, has record breaking quarter after quarter, has the most loyal user base, and on and on. Yeah the sky is falling.

  • Glenn

    why Invest in a company that you have little faith in? Personally I believe Apple is doing great things, the quarter didn’t disappoint me at all. Tim Cook is doing a stellar job and so are the apple employees the fundamentals don’t lie.

    • Majipoor

      Because he does not invest, but speculates. And now, he wants APPL to go down as much as possible in order to buy again in a few months and make more profits. Markets are driven by speculators.

  • Dave Kaduk

    Apple doesn’t control their stock price, shitty hedge fund managers do.

  • GTWilson

    It was a shareholder meeting, dipshit.

  • bryan

    Let me get this straight. AAPL has a p/e of ten. And the sky is falling? You’d rather have MSFT at 16? Or GOOG at 25? Maybe TSLA at, oh thats right they haven’t EVER made a profit. What a bunch of wackos. Name one other company in the top 100 earners with a p/e even close to ten.

  • http://www.facebook.com/people/Koen-van-Hees/1301049198 Koen van Hees

    trading places all over again. sell sell selllllllll. Alas, without boobs…

  • http://www.acid-product.co.uk Ian Davies

    It wasn’t an “Apple Event” you toolbag, it was a shareholder meeting. Whiny, entitlement bores like you are everything that’s wrong in journalism.

  • Nate

    “Microsoft…is winning over teens…with its Surface now appearing cooler than the iPad.”

    Mr. Reeves: Did you just cite an article by “Windows Phone Central” as though it is an objective source on customer buying trends??

  • Space Gorilla

    “Continued trouble to capitalize on enterprise”. Really? Wasn’t there just a report on Fortune 100 companies that showed iOS devices dominating enterprise?

  • Paul

    This guy is an IDIOT, completely and irrevocably in fact is an insult to idiots. Who hired this moron?