More Apple Insanity

by,

Suzanne Coleman

So Apple reported it’s quarterly earnings this afternoon, and guess what?  They again blew away expectations beating both gross and net income.  Their profit surged 38%.  But traders sold the stock and caused it to plummet the instant the results were reported.  Why?

Insanity, that’s why.  The only valid negative in their report so far (which actually came AFTER the drop) was that sales were DOWN in China.  Now this is important as China was a major income source.  We don’t know why sales are down there, nor what it portends for the future of the market all-around.  But even with this negative, Apple’s earnings and sales were outstanding.  iPhone sales were up 35% to 47.5 million phones.  This is the main profit contributor.

Other items increased as well, including services (I believe this includes Cloud and Apple Pay), and the “other” category where they have currently placed the new product the Apple Watch.  They also added later that the Watch brought in more than one BILLION dollars in sales this reported quarter.

In the future, this growing and ridiculously financially-stable company will continue to do well.  So again, why are people selling it?  These people are likely day- or hour- traders who jump in and out of stock positions and disrupt the market at times with their actions.  Long-holding owners and institutions would be wise to buy in now.  I believe that it will go back up.

Its stable price point over the last several months has been $125-126.  It will return to that level, or more likely, surpass it to at least $128-129.  Analyst estimates should again rise after this report, likely up to $160.  So, again, why are people selling?  I guess we’ll just have to wait and see what happens.  These are generally the same people buying into stocks with outrageous PEs and no profits.  Speculators is what they are called, and sometimes they do very well, but other times, they are wrong.

_________________

Yep, marketwatch.com (where I got the reported numbers above) just wrote that Piper Jaffray’s analyst Gene Munster raised estimates to $162.  4:29pm CST

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