Wednesday, April 24, 2013

Investopedia: The Defenestration Of Apple Continues

As I suggested back in January on this website, I thought Apple (Nasdaq:AAPL) could have further to fall as growth investors and fan-boys dove off the bandwagon in the wake of less-than-perfect execution. In that short space of time, the shares dropped about 20%, leading to a huge loss of shareholder wealth (at least on paper).

Apple is a curious stock to me now. I do believe that the stock is too cheap relative to what I see as the probable trajectory of revenue and cash flow. By the same token, I've been at this too long to underestimate the headwinds that a stock can face when a large base of shareholders becomes disenchanted with a story and moves on for greener pastures. I do believe that patient investors will do better than just okay in Apple shares from these levels, but investors buying in today have to accept at least the risk of a further over-correction on the downside before the shares start to perform again.

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