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.
- Apple is prohibitively expensive in India, the world’s second-largest smartphone market by users. (BeyondBrics via FT.com)
- Derek Thompson wonders if Apple’s weakness is its runaway profitability. (The Atlantic)
- Some apparently think Apple’s reluctance to tap its mega stockpile of cash is a good thing. (MarketBeat via WSJ)
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing, he owned a position in Apple … but not for long.