Down 25%: What's Wrong With Apple?

In the video below, Motley Fool tech analyst Andrew Tonner takes a look at the recent movement in shares of Apple (NASDAQ: AAPL  ) . The stock is currently trading 25% off its 52-week high, but Andrew believes that the skeptics are wrong.  

The reasons for Apple's share price decline do not have anything to do with the long-term investment thesis for Apple.  As Andrew notes, tax selling may be contributing to pressure on the shares; with the stock up 35% during 2012 and significantly more over the longer term, investors may have felt pressured to sell shares while capital gains tax rates were lower before the fiscal cliff. Vague discussion by analysts of technical issues and whether Apple's products are no longer in vogue are typically not supported by any real substance and focus on a short term mentality.

The fundamentals for Apple have not changed. New products, including the latest releases of the iPhone and iPad, are providing growth this holiday season. Meanwhile, the stock remains cheap from a valuation perspective and Apple's growth characteristics continue to remain a bright spot for investors with a long-term view.

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Read/Post Comments (13) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 04, 2013, at 8:08 PM, DrGoldin wrote:

    When was this recorded? If it's all just tax selling, why did it drop another 2% today?

  • Report this Comment On January 04, 2013, at 9:49 PM, wwu12345 wrote:

    You guys at the Fools are posting videos on AAPL too often. There was another one posted only a couple of hours after this one. Based on what happened on Thursday and Friday, we know that AAPL's drop has nothing to do with the cliff and tax selling. AAPL does not even has the staying power to keep its gain from Wednesday. What a difference if you compare the recent performance of AAPL to my major holdings such as ACAS and NOK.

    I wanted but never had the courage to short AAPL when it was at $700, but I definitely will not buy AAPL at this point.

  • Report this Comment On January 04, 2013, at 10:01 PM, sluggo47 wrote:

    Big hands are flushing out all the weaker hands. It would be very surprising if aapl does not rally big into earnings. Analysis are all over the place on Apple and there is no consensus for the last quarter.

  • Report this Comment On January 04, 2013, at 10:09 PM, MrSmith210 wrote:

    @wwu12345:

    lol. NOK.. outperforming AAPL in the last qtr. How's that 2 yr. chart working? Many have held AAPL even longer. You do realize NOK is down 60% while AAPL is up 70% in 2 years right?

    But suddenly AAPL has a rough qtr and now you "definitely will not buy AAPL" ? Really?

    Enjoy NOKIA. I'll watch Apple crush earnings as usual in a few weeks and my buying dips become.. YET AGAIN FOR 2 YEARS NOW.. a great move.

    Don't be sucked into the garble. Apple is a winner whether you love or hate their products. Don't be so emotional. Make money. Apple is a WINNER for even medium to longterm investors.

  • Report this Comment On January 05, 2013, at 12:05 AM, wwu12345 wrote:

    MrSmith210:

    Investing in stock is speculative in nature. It is about future prospects. The main issue I see in AAPL is margin and growth rate. Estimates are coming down gradually. If AAPL beats the current estimate, but future estimates remain in a downward trend, the stock has a problem.

    Certainly, it is speculative. Nothing is for sure. No reason to argue. Check back a year later, we will see the difference between AAPL and NOK.

    I personally use an iPhone 4S, and I have no desire to upgrade to the new iPhone 5. I have an open mind. I could change my mind when I had a chance to try out iPhone 6 in the future. But, now, iPhone 5? NO. I have tried Nokia's 920, and I am waiting for the time that I can upgrade to the 920. Quite a few friends of mine have upgraded to the 920 instead of the iPhone 5. The reason, the iPhone 5 is out-dated in their mind.

  • Report this Comment On January 05, 2013, at 5:02 PM, TimKnows wrote:

    We seem to be getting all of the Apple crazies here, like InfoThatIsntSoGood, I haven't seen so many investors worry about their investments quite like Apple guys do.

    Its only money, you are going to learn a valuable lesson this year as Apple has lost its shine and no one wants it any more. Their products are really boring aren't they?

    Then you have guys like Tonner trying to pump a company that is failing, when will it ever end?

  • Report this Comment On January 05, 2013, at 5:29 PM, TimKnows wrote:

    Crazy video, is he okay?

    Apple is dying off, falling demand and dull products, the competition is walking all over them.

  • Report this Comment On January 05, 2013, at 5:31 PM, TimKnows wrote:

    InfoThatWorriesUs - are you okay?

  • Report this Comment On January 05, 2013, at 6:26 PM, Arthur1111 wrote:

    This video was made on Dec. 6, 2012. It is one month old. It makes Apple looks worse, because as of yesterday, the stock was down to $527 which is $20 less than the video shows.

    Anyways, it is a further proof than Apple is not a good investment. By the way, Apple needs to spike 33% to recover the 25% loss.

    Going forward, I see RIMM as the best investment for 2013. I think the stock will surge in the next 4-6 weeks and continue to grow for the rest of the year.

    Sell Apple and buy RIMM. It is the best investment move you can make.

  • Report this Comment On January 05, 2013, at 7:03 PM, smartinfo wrote:

    Apple is for kids.. don't believe me just check out what your kids are using and want. Blackberries are for professionals just check out what your adult successful friends are using (all government lawmakers .. the president .. ect). With credit cards going the way of pc's you will need the most secure platform available as smart phones will be the new credit card. This will be the end of Android as a serious device as its open eneded platform will have hackers droolling. Blackberry has the most secure platform out there and cannot be challenged. Once BB10 gets started look out ... you tell 2 friends ... they tell 2 friends and so on and so on .. check out this link .I've said too much already .. http://www.youtube.com/watch?feature=player_embedded&v=F...

  • Report this Comment On January 06, 2013, at 11:38 AM, TimKnows wrote:

    Nut jobs posting for Apple and bashing its superior BB 10, not too worried!

  • Report this Comment On January 06, 2013, at 1:44 PM, Brchr1 wrote:

    Mr.Smith I concur the investing community has the memory of a gold fish!! Last year the same time the stock was also down, what happened with holiday earnings? Everyone realized the company was trading at a single digit earnings multiple without backin out cash!! Took that ride!! And I'll take this one for a hefty gain.

    If I can make two comments for everyone to think

    About

    Revenue is vanity

    Margins are sanity

    Cash Flow is King

    So I guess Apple is King right?

    Doesn't matter if you like apple or not

    No one can deny this companies cash flow

    And to say this company is dead is just plain moronic! THEY HAVE MORE MONEY THAN THE US GOVERNMENT AT ANY GIVEN TIME!!!!!

    . Oh, margins shrunk to below 40 percent, are they STILL not the highest in the industry ( maybe even in any industry? Not sure of this but seriously show me any other company with these margins!?)

    Be a naysayer but don't be ignorant to this companies status as basically a money printer!

    Finally I was reading so much bad stuff about iphone5 I almost picked up the sg3 but decided to give apple another shot just to see, and wow what did I find? I absolutely love this phone! It's light, sleek, sexy, fun to use, fast, ha an amazing screen ( anyone arguing about screen color and clarity with the sg3 is wrong ! iPhone 5 wins because of the new touch In Display that lowers refraction - and reflection) anyway both phones are actually awesome it only matters what your preference is

    So In summation both companies ( Apple and Samsung, I don't include google because for all their wide spread usage, THEY DON'T MAKE MONEY ON THEIR SOFTWARE) IMHO will be KILLING 2013! ( I would buy Samsung but then your buying into all their other industries which aren't nearly as profitable)

    And RIM AGAIN IMHO is the speculative trade

    Anyway I love the smartphone wars and may 2013 bring on more innovations than ever before!

    Ps I like the Nokia phone also but I'm into design and form factor and please say what you want about apple not having NFC or a bigger screen

    But no one can deny that the phone I'm writing this on right now ( for anyone who jumped in at the end of this rant it's an iPhone 5) the sleekest designed phone yet!!! ; ) happy investing everyone!

  • Report this Comment On January 06, 2013, at 1:53 PM, Brchr1 wrote:

    P.s sorry to be long winded but as a side the new iMac ?!! Anyone who's into A gorgeous living space and computers that are aesthetically pleasing will want this computer!! Show me a Competitior to this product!! ( seriously is there anyone with a product like this!?) Don't believe it's everything I'm saying? LOOK IT UP! It's sick!

    Anyway I digress bring on the naysayer! ; )

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