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If someone asked that question 60 years ago, the most common answer might have been, “An apple a day keeps the doctor away.” Asked 40 years ago, one might have replied, “The Beatles record label? I love it!” Asked 30 years ago, the answer might have been, “Do you mean the company that is making the MacIntosh? I’m waiting to see what that’s all about.” Of course, the question refers to the latter, the ubiquitous tech company that personalized computing and the entire digital consumer world. Apple’s share price (NASDAQ:APPL) is down 0.60% today at 100.392.
The Apple share price is at one of the those points that I think can be misleading, which is why the rest of the story needs to be told in order to have the right perspective. The truth is that it reached a record high of 103.74 on 02 September and closed at 101.00 yesterday. So, yes, in that sense, it is down. But it is up, really up, from one year ago when it was trading as low as 63.89.
The Question at Hand
The reason I ask the question, “What do you think about Apple?” is that I read two similar questions over the past several days. Both the questions and the responses intrigued me.
- “Apple’s big announcement is today. What are you watching for the most?” Of course, the multiple choices included the new iPhone, the Apple smart watch, and the share price. To be honest, I was surprised at the responses. Perhaps I shouldn’t have been. Only 19% were interested in the Apple share price. Nearly half of the respondents were interested in Apple at all.
- “Would you buy and Apple Watch or Apple stock?” The responses to this question quickly degenerated into a typical message board type debate between two guys with nothing else to do, replete with special terms of endearment for each other. Aside from those fellows, the most common response has been something like this, “Neither . . . both are overpriced.”
My Conclusions
Frankly, Scarlett, it appears that the world doesn’t give a you-know-what, and that, despite all the hoopla Apple tries to create around its product releases, people in general are not expecting Apple’s share price to climb much higher, although analysts seem to concur that the stock still has room to climb to around 110.00 to 115.00 with a high end speculation at 139.00. Apple’s shares are currently selling at over 16 times forecasted earnings.
The feedback from the survey questions may be a better indicator of what the man on the street thinks, but the analyst ratings are not all that glorious, especially considering “the company’s lack of big new profit drivers.”
Whether Apple’s share price will go up or go down is not the real question. From its current price, it is much easier for the stock to decline than to increase significantly in price. As competitors introduce their own advanced technology, the polish that Steve Jobs put on the Apple is losing its luster. If it continues to do so, eventually the waning consumer hunger for Apple innovations will affect results which, in turn, will affect the share price. That’s what I think.
Ultimately, what I think is irrelevant. The real question is, “What do you think about Apple?”
