Are you sick of AAPL yet?

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Apple Stock Has No Upside From Here

Well, that was short-lived. Apple (NASDAQ:AAPL) made a higher low close to $480 at the beginning of February and some thought it would move higher … but the overall downtrend has continued and the tech stock is once again plumbing the depths of its 52-week range.

So what’s in store for Apple stock from here? Unfortunately, not a lot of upside. Many issues are conspiring against this pick, from headlines to sentiment to the charts, and it could be a tough row to hoe back to $500 let alone $600 or $700.

Here’s what’s going on at Apple right now that investors need to know:

Charts Say $390: Tim Knight at Slope of Hope has been warning of continued downside to Apple stock based on the charts for some time, and he continues to beat the drum on the technicals. The latest post from Knight shows higher lows trending down to about $390. Ouch.

Supply Chain Troubles: Some of us in the financial media have been talking a lot about how Apple earnings have been hit by a supply problem and not a demand problem. Well, if you believe that to be true, don’t expect any alleviation in the near-term. Consider the recent FoxConn hiring freeze and what that will mean to production. And bigger-picture, Apple still suffers from a product bottleneck. Last week, a great report by Henry Blodget of Business Insider showed that the success of the bigger screen on the iPhone 5 and the pressure from competitors with larger displays might mean a race to retool its smartphone line. Blodget goes on to quote an analyst who claimed Apple intended a big-screen iPhone “phablet” this year, but manufacturing bottlenecks have pushed the device back to 2014. In short: If you think supply issues are over, think again.

Margins, Margins, Margins: Blogger Eugene Wei shrewdly wrote recently that a high-margin company (especially a tech stock) “screams for a competitor to come in and compete on price, if nothing else, and it also hints at potential complacency.” That pretty much explains Apple — as well as the ascendance of Samsung (PINK:SSNLF) and devices powered by the open-source Google (NASDAQ:GOOG) Android operating system. Recent earnings show continued deterioration in margins, and that trend is sure to continue.

Innovation Concerns: There is talk about an Apple TV and an Apple watch, but we have yet to see any new gadgets that smack of the old innovative business consumers came to know and love under Steve Jobs. Investors are starting to get antsy for something new — and the longer they wait, the bigger the splash will have to be. A resized iPad or iPhone isn’t going to do it.

Enterprise: Just this weekend, I had perhaps my 100th conversation with an IT person who said Apple is too stubborn to play nice with corporate tech, and thus is a non-starter for many government and business applications. How long can Apple keep this up, given the lucrative nature of enterprise tech? BYOD policies only get you so far. And now BlackBerry (NASDAQ:BBRY) is out with its new line of BB10 devices, and Surface and the Windows Phone from Microsoft (NASDAQ:MSFT) seem to be gaining ground in IT circles even if they are not super-sexy to the majority of consumers just yet. Apple needs to figure out the key enterprise segment.

Einhorn Distraction: As an Apple shareholder, I would love to get a big special dividend or something. But color me skeptical that David Einhorn of Greenlight Capital is looking out for anyone other than himself with a lawsuit against Apple regarding his preferred stock policies and overtures about a one-time payday to shareholders. Especially after the Herbalife (NYSE:HLF) dust-up, the last thing Apple stockholders want is an egomaniacal hedge fund manager messing with an already sentiment-driven stock.

Dividend and Buyback Plans: Apple is about to hold its annual shareholder meeting on Feb. 27. This would be an ideal time to make investors feel better by re-instituting a vigorous buyback plan and increasing the dividend on Apple stock. But if an increase isn’t revealed here — or if the hike is disappointing — it could rattle AAPL trading. After all, I personally continue to hold Apple for the long-term potential of this play thanks to dividends. If there aren’t signs that leaders are committed to returning a bigger portion of Apple’s massive cash hoard to shareholders, it’s not going to sit well with me or others.

This is not to say Apple is dead. I remain convinced that despite the short-term negativity, there is a long-term play here. Back in January, I contended that $425 would be a good entry point and I remain convinced that is true.

Of course, that just happens to be a little south of my cost-basis and I could just be fooling myself … so take my advice with a grain of salt.

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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 did not own a position in any of the stocks named here.

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