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The Futility of Apple's Fundamentals

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It's been a long six months for Apple (NASDAQ: AAPL  ) investors, myself included. Amid the company's well-documented pullback from its September highs, investors have continued to get cut while trying to catch the falling iKnife.

Even right here at The Motley Fool, we've continued to boldly proclaim different times to buy, citing the Mac maker's rock-solid fundamentals (shown here with approximate closing prices):

How wrong my fellow Fools and I have been so far each and every time, as shares have proceeded to tap a fresh 52-week low of $419 just days ago. Along the way, we have noted that every valuation metric in the book is seemingly at rock bottom, but shares just kept getting cheaper. At that low, shares were trading at just 9.5 times earnings and 6.2 times earnings ex-cash.

AAPL P/E Ratio TTM Chart

AAPL P/E Ratio TTM data by YCharts.

The problem we all share is neglecting the fact that Apple has become a pure momentum stock as fickle traders (both institutions and individuals) pile in and play the swings. Traders, by their very nature, pay little to no mind to fundamentals. After all, if you're holding a position for only days or even hours, what does it matter that fiscal 2014 revenue is forecast at more than $200 billion?

When emotions are firmly in control, trying to value a stock based on fundamentals can prove to be utterly futile in the short term.

Not-so-sweet emotion
Only when you're in an environment where emotion overshadows reason does irrationality begin to make a little bit of sense. There's simply no legitimate way to justify just how far Apple has fallen.

To be fair, Apple absolutely faces some very real challenges in the near term. Samsung has become a formidable rival through a combination of product breadth, sheer size and scale, wide distribution, and a simply breathtaking marketing budget. Apple's current smartphone strategy of focusing on the high end of the market is hitting a ceiling as saturation within developed markets sets in, leading to iPhone growth deceleration.

Competitors in the tablet market are now starting to gain traction, even as the iPad remains the defining device. Investors have grown frustrated with Apple's unreasonably large cash position, which alone is larger than Intel's entire market cap. Margins may never again reach levels seen in 2012, when gross margin briefly flirted with the 50% threshold -- previously unthinkable for a company with substantial hardware operations.

Source: SEC filings. Calendar quarters shown.

These are all entirely reasonable causes for concern. However, acknowledging it still doesn't properly explain why Apple is getting no respect in the market.

Worse doesn't mean bad
Companies with worse figures than Apple (even after considering the aforementioned risk factors) are still fetching much higher trading multiples than the iPhone maker. Even if gross margins continue declining and stabilize between 30% and 35%, those are hardly bad figures, even if they are worse than the unsustainably high levels of profitability of yesteryear.

Apple is painfully confronting the Law of Large Numbers, since it can't realistically be expected to continue growing at the same rate. Over the past five years, it's posted an average revenue growth rate of 45%. At $165 billion in TTM sales right now, anything below $239 billion in sales over the next year will technically be less than that average.

Even Intel, a company that has a lower net margin and less promising growth prospects going forward, is fetching higher multiples than Apple. All of the concerns facing Apple's business combined still don't make sense of the fact that Apple is one of the cheapest stocks in the market. Apple is now valued alongside grocery stores and department stores that are saddled with debt and plagued with razor-thin margins.

In fact, Apple is now valued within the bottom 6% of the market, even as the company is still one of the greatest cash machines known to man.

Dramatic irony
Just to be clear, I'm fully aware of the irony of this article. I'm know I started by saying fundamental analysis is proving futile right now -- and then proceeded to cite fundamentals. The distinction is that emotions and momentum are short-term factors, while fundamentals are the long-term Fool's tools.

The greatest investment opportunities prove to be the ones where emotions dictate prices, specifically because they disconnect price from intrinsic value. At the height of the financial crisis, patient value investors who bought near March 2009 lows and held on for the wildly emotional ride were greatly rewarded.

Apple is in anything but a financial crisis right now, but it is definitely facing crises of confidence, identity, and maturity. Patient value investors will be greatly rewarded again.

Emotions got you down? We have just what the Fool ordered.
Ignoring emotions is hard, but that's exactly why we've put together bonus reports to ease investors' minds. Apple's growth story is far from over, and the company still has massive opportunities ahead. We've outlined them right here in The Motley Fool's premium Apple research service, and it may give you the courage to be greedy when others are fearful. If you're looking for some guidance on Apple's prospects, get started by clicking here.

Read/Post Comments (35) | Recommend This Article (57)

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 March 09, 2013, at 7:14 PM, tychicum wrote:

    The cream always eventually floats to the top.

  • Report this Comment On March 09, 2013, at 7:44 PM, jordanwi wrote:

    I have a feeling that they're going to talk cash this week, for 2 reasons:

    1. It was around this time last year when they announced their dividend (I'm pretty sure anyways... ;)) and;

    2. They will want to steal headline from the S4 launch (which is going to be massive). Whatever they announce will be to stem the stock free fall, but we'll see how successful that will be. If it's a big enough boost, income investors will take note.

    Although I'm worried for the near term, the built out ecosystem will reward shareholders much like a new-age Microsoft. That's at the worst. At the best, new products will continue the growth trajectory and we'll all get rich. I hope it's the best case scenario.

    It seems like going up against Koreans with ANYTHING is really really hard though. Oppa gangnam style!

  • Report this Comment On March 09, 2013, at 8:26 PM, techy46 wrote:

    Apple needs to do three things, 1) increase dividend, 2) split stock so that smaller investors can trade 100 share lots and sell calls and 3) cover the low and high end markets with small and larger screen devices like Nokia's Lumia is doing. Part of number 2 will be addressed on Marxg 18th when mini options for 10 shares of Apple start trading.

  • Report this Comment On March 09, 2013, at 9:44 PM, AboutYourCat wrote:

    I'm just a dumb guy..... but it seems to me the author is resentful that Apple isn't genuflecting to the financial media..... and I use the term media in the loosest of terms..... Apple is under no obligation to you..... do you realize how vacillatory you sound?.....

    and to Techy46..... the worst thing Apple can do is to split their stock to allow the bloodsucker daytraders more access..... and I personally believe it's the way Apple would like it to stay to minimize volatility.....

    you're all crying because a company won't allow itself to be influenced by all of your crystal ball pipe dreams..... and I say good for them.....

    look at the fundamentals..... and if you want it..... buy it..... but don't criticize for the sole purpose of vindictive instigation.....

    "people who don't like Cadillacs..... can't afford cadillacs."

  • Report this Comment On March 10, 2013, at 5:56 AM, bbrriilliiaanntt wrote:

    Dollar cost average into AAPL, your average cost basis will be less than the average share price for that same period, 2nd grade irrefutable math, investing is easy...

  • Report this Comment On March 10, 2013, at 10:40 AM, rkiefl wrote:

    Bingo! @Brilliant

    You can't catch a falling knife but you can catch a few slices of the blade. It'll hurt as it continues to fall but if you believe in the fundamentals those scars will profit on the way back up. That and at least you won't get stabbed. AAPL isn't immune to its own cycles but I'd agree that it as an emotional stock until we have a critical mass of investors over traders.

    When apple hit 500 for the first time I began to free up some cash seeing a potential opportunity and I aside a specific amount to buy at predefined price levels. 420 was the last and 370 is the next. I'm 80% of that cash in and I think we're near bottom so I may not end up buying that last 20% but that lost investment value represents risk mitigation.

    If I'm wrong about the fundementals then my bet was wrong and that's just part of this game we play.

  • Report this Comment On March 10, 2013, at 3:01 PM, jameskatt wrote:

    Apple should buy Intel. It has the money.

    Apple can then make the PC CPU exclusive to Apple's products.

    This would immediately kill Microsoft Windows and XBox.

    This would immediately kill Sony's Playstation.

    There would be no more PCs other than Chinese ones.

  • Report this Comment On March 12, 2013, at 10:51 AM, SkepikI wrote:

    ^ and the Feds will never allow it.... for nearly exactly those same reasons... but it would make for interesting and profitable times were AAPL to start the rumor. For me when its under $430, an apple a day is a nice average in strategy.

  • Report this Comment On March 12, 2013, at 12:08 PM, brenoboyle wrote:

    The lesson I take from AAPL is to avoid crowded trades at any cost. You can quickly page through the 13F filings at Y-Charts: it is amazing how this lowers volitility and increases return.

    AAPL is a great company, but as a fundamental and value driven investor I simply can't invest in the stock.

  • Report this Comment On March 12, 2013, at 12:23 PM, TheDumbMoney wrote:

    The distinction between now and the prior articles is that $420 has been hit. That is a retracement of the parabolic price increase that culminated in the spring, and was a target of many of the technical guys you talk about at the beginning of the piece. That's not to say it can't go lower, but from a technical perspective, the stock is probably safer than it has been in six months. I added to my long-term position at around $440 a week or so ago. Also worth nothing that Apple yields more than a 10-year Treasury.

  • Report this Comment On March 12, 2013, at 12:33 PM, TheDumbMoney wrote:

    noting, not nothing

  • Report this Comment On March 12, 2013, at 2:50 PM, buddyglee wrote:

    jameskat holy crap that would be insane.

    i dont think the government would let them do that

  • Report this Comment On March 12, 2013, at 4:24 PM, ObsidianMTness wrote:

    I believe that APPL's tumble to its 52 week low is not about its solid financial fundamentals. Great companies also need a CEO with a vision and gambit. The vision allows people to anticipate something great coming around the corner and that's what the company lacks at this point. That could only happen with innovation. In the past, leaks about up coming products created excitement in the market. Now, people seems to say "so what?" Maybe the masses need more juicy tidbits about upcoming iWhatever?

    Gambit is another matter. When the iPhone came out, Blackberry and Palm were making PDAs that many used at the time. But Steve Jobs introduced a product that combined the strongest parts of these companies' products in the iPhone. They were cellphone capabilities (Blackberry), powerful business applications (Blackberry), ease of use (Palm), cool optional peripheral accessories (Palm).

    Ultimately, it seems that without a shrewd visionary leader, people (including investors) are sure they'd want to put money in a company that lacks direction. In time, aimless languid wanderings and dead end products would whittle down the best companies with solid financial fundamentals.

  • Report this Comment On March 12, 2013, at 5:00 PM, Landsman55 wrote:

    My take on Apple:

    1) The iPhone may have been a one trick pony--no other product they have developed has exhibited the same dominance and that product has been commoditized. I am an all Apple user, but they don't dominate in other products.

    2) Apple users and stock owners treated ever iteration of the iPhone as an innovation, It wasn't.

    3) Maybe there is just general gadget fatigue. Does the idea of an iWatch really excite anyone? Can you really get worked up over a new TV, I mean do you really care what you are watching Breaking Bad on, it's the content that counts.

    4) There is no philosophy around cash management that can justify that cash horde. Boeing develops jets with less and there are no acquisitions it can make that either will clear antitrust review or take Apple out of its core of competence.

    5) This is another Motley Fool stock where the coverage has lost any dispassionate viewpoint. "Patient value investors will be greatly rewarded again." Maybe that's right or maybe it's also based on the Law of Large number as to how many times in a row will Fool analysts can be wrong. I mean if I loved it at $600, I got to marry it as $430, right? If it goes to $375 just take your kids college fund and pile because you are doing them an unbelievable favor.

  • Report this Comment On March 12, 2013, at 5:57 PM, Winnie2013 wrote:

    Though I cannot change what has happened to Apple.....dropping 40% in value during a period where they reported revenue and earnings numbers greater than any technology company.

    I thought I was prove the absurdly by comparing different companies current P/E ratio and what price Apple stock would best their current P/E ratio....

    KO. P/E. 20.... Apple would be at $882

    VZ. P/E $255...Apple would be at $6836

    eBay P/E $53.....Apple would be at. $2337

    WHRL p/E $23.57... Apple would be $1039

    DOW P/E $46.88... Apple would be at$2067

    IP. P/E. $27.29.....Apple would be $1203

    Drum roll please...

    AMZN. P/E $ would be at $133,667

    My point is to say Apple NEVER traded at a P/E higher than $22 during the 5 years revenue and income grew over 60% Y over Y.

    So Apple was NEVER overvalued.

    So how do you justify a 40% haircut in a very short five month period.

    Add it the fact Apple sales revenue was $137 million A DAY LAST YEAR.

    add in that Apple cash flow was $427 million A DAY LAST YEAR.

    If you can't justify a high multiple during this unprecedented five growth do you justify a market trashing ....

    I do not have an answer...I just watched it happen.

  • Report this Comment On March 12, 2013, at 6:02 PM, Winnie2013 wrote:

    Sorry I posted the sales and cash flow numbers back words ....

  • Report this Comment On March 12, 2013, at 6:36 PM, dwilh51183 wrote:

    Buy aapl NOW! Company is solid even though Tim Cook has failed to produce 2-3 cheaper phones to sell poor people and iphone6 pro. Also, get china mobile signed and get a trade- in program going for people who buy new AAPL products. All I see on tv are cool commercials for kindle fire and Samsung. What the heck , mr cook. Lets go. Get some products developed NOW. NOT 6 months later, now!!!

  • Report this Comment On March 12, 2013, at 6:38 PM, neurocycler wrote:

    While I'm of the mind that Apple's current valuations represent a potentially huge opportunity, I'm also wondering if there are other examples from recent or distant history where a stock priced languished at low valuations for a long time before rebounding. The argument for a rise in Apple's stock price is strong, tantalizing. While many whine and wring their hands about the price, I'm salivating. But the question for me is not if, but when? Months, years, decades? I don't have decades.

  • Report this Comment On March 12, 2013, at 6:49 PM, proudamerican1 wrote:

    Anyone familiar with technical analysis (I know this topic is a sin on The Motley Fool') can see that AAPL is not even near a bottom. It broke its long term trend line several months ago and has just barely broken is down trend line. This supposed break needs to be confirmed. Thus it needs time to confirm this break, to build a new base, and to give the necessary signals that it is ready to break out of this new base. This is normally a process that takes months.

    Furthermore, more time is needed to see if Steve Jobs' replacement is really up to snuff. After all, it was Jobs' unique vision and sense for what's going on that provided the light for AAPL's outstanding course. Some even think he was irreplaceable. Again, time will tell.

    Therefore I, for one, will let future events and the stock tell me when AAPL is through going down, has built its base and that it is ready to start gong up again. I know that this flies in the face of a lot of the advice presently on The Fool, but that's how I see it.

  • Report this Comment On March 12, 2013, at 7:21 PM, phrush wrote:

    Almost all of these comments miss the only two points that really matter - 1) Will the iphone lose half of its market share, and 2) Will the iphone lose half of the "subsidy" from the carriers.

    If either of these (or a 50-50 mix of both) occurs, aapl's "correct" PE approaches 20. At that level, aapl would be fairly valued.

    If the damage inflicted by Samsung/Google's brilliance in copying the iphone (and admittedly in Samsung's case - its ability to build on it and recognize the need for product proliferation) and aapl's incomprehensible failure to adapt (after all, remember the brilliance of of its ipod product planning) is less than that 50% drop, aapl remains a strong buy. That is true even if it has lost the Steve Jobs mojo and has become just another pretty good tech company.

    And if does have some more innovation up its sleeve, even if it is only the hold-over of Steve Jobs' vision.......

  • Report this Comment On March 12, 2013, at 7:59 PM, jaymemu wrote:

    bought aapl at $155. Sold at $431. Would like to buy more, but just not sure if the bottom has been reached.

  • Report this Comment On March 12, 2013, at 8:21 PM, eldetorre wrote:

    irrationality? Not at all. Remember investors invest to earn a return. It doesn't matter how well a business is doing if it doesn't yield a return to the shareholders PERIOD!!!

    The only way investors get a return is through stock appreciation or income.

    People are coming to realize that Apple is more of a marketing innovator than technical innovator so the upside to the stock is limited. If they paid a better dividend then it would return real value to shareholders.

  • Report this Comment On March 12, 2013, at 8:34 PM, JamesHoJuice wrote:

    That's unfair to consider that non-buyers at this price are fickle momentum traders.

    The powerful effects of competition in the consumer tech space comes swiftly and the effects usually are quite dramatic.

    Many fundamental investors have fallen into the trap believing Apple is a value "play" due to straight-line growth and have opted not to focus on the balance sheet.

    The P/B is 3.16 . That is not cheap in terms of Book Value at all. Sure, you may argue that Apple should be valued as a going concern. I agree. But Benjamin Graham thought the concept of balance sheet focus, because he understood how easy it was to be overoptimistic about operational results.

    The speed of change in technology is lightning fast. I think NOKIA makes quite a compelling case study on how things can change quickly- From largest phone manufacturer to catch-up dark horse. And Apple might just turn out to be on the path form- Best smartphone maker to playing catch-up.

    It pays to keep in touch with the latest developments in Mobile Tech. And when fundamentals have changed, investment convictions should change too.

  • Report this Comment On March 12, 2013, at 8:51 PM, badsangria wrote:

    Just when I thought I'd heard it all, a Forbes magazine writer speculated on companies Apple might consider buying: Comcast (okay, I could see that), Intel (hmm, maybe), Amazon (interesting), Starbucks (huh?) or McDonalds (what the...). The lunatics have truly taken over the asylum.

    No more averaging down. No more listening to vapid analysts prattle on well after the cows have left the barn. And with all due respect to Peter Lynch, be careful about investing in the companies you know, especially if you are enamored of their products.

  • Report this Comment On March 12, 2013, at 10:52 PM, observerbob2013 wrote:

    The real problem with Apple is that it no longer has Steve and there is nothing yet to indicate that it has a replacement for him.

    The problem with a one-man success story is that the loss of that man (or woman's) vision if most often catastrophic and many remember the last time Apple lost steve.

    I agree that Nokia is a classic case of a company with the leading product that fell asleep at the wheel and Apple seems a lot the same.

    To me the best indicator of this is when a company spends millions trying to protect its old patents rather than building new products. Yesterday's idea is still yesterday, especially in a fickle tech-consumer market.

    I agree that most of the fundamentals look good and I am generally a fundamental investor but the fact is that this is a fickle market that can destroy fundamentals overnight

  • Report this Comment On March 12, 2013, at 11:17 PM, SteveVaughan100 wrote:

    There is a strong possibility we may be seeing just a moment in time that we thought would last forever - not unlike American postwar economic dominance that produced a huge economic boom that was the envy of all the world.

    With a bit of perspective, we're seeing that the dramatic success of Apple had to do with a once-in-a-lifetime CEO and visionary being in the right place and the right time with the right technology emerging. Nothing we've seen since the passing of Steve Jobs has convinced me that Apple will once more be able to capture lightning in a bottle (or a cell phone).

  • Report this Comment On March 13, 2013, at 12:15 AM, LazyOldMan wrote:

    It is clear that with a 40% drop in six months we can expect that to continue until after just 12 months the stock will be back at $140 per share. A quick look shows the almost linear nature of the fall... therefore it is easy to predict the future. even more interesting AAPL should reach $0 by the end of the year.

    Re "Apple is just a marking company" This is truly so wrong in so many ways I can hardly respond. But, an example of an outfit that is just exactly that a marketing company is Amazon. Consider, that logic and the APPL vs AMZN P/E ratios.

    If it were just a marketing company AAPL might be over $100K per share based on income.

  • Report this Comment On March 13, 2013, at 4:44 AM, tmloon wrote:

    Sorry to be pedantic but the Law of Large Numbers is not about slowing percentage growth:

    Back on topic, surely AAPL could use some of that gargantuan cash pile to buyback shares? They could even borrow against cash held overseas if they're reluctant to take the tax hit on repatriating it, retire stock and drive that PE even lower and divi yield higher.

    Sooner or later the market has to reflect the underlying fundamentals...

  • Report this Comment On March 13, 2013, at 5:13 AM, fkim wrote:

    Just about all the above comments are very thoughtful and intelligent reflections. I enjoy reading about the investors writings. As you can see, how wrong predictions or deceptions they (so called, experts in the market) have fabricated for AAPL in the summer of 2012. The people screamed that AAPL is going to hit 1k per share, soon. What's now for APPL? In order for APPL to go back to $650.00, it has to go up 50% from here. When will it be? In 2004 to 2006, wasn't the real estate market (so callled, experts in the market) deceived the home buyers? My recommendation to the readers (especially to retail investors) is: Do not get sucked in by the deceivers. What I see in these days around me, people lost interest in Apple products.

  • Report this Comment On March 13, 2013, at 8:28 AM, mikecart1 wrote:

    Would like to see something about Apple without a discussion on its cash pile. While everyone yells at Apple, GE has over $100 billion not getting taxed overseas. GE and AAPL are not the only companies with significant cash piles for what they bring in as net income annually.

  • Report this Comment On March 13, 2013, at 9:58 AM, WestBend1 wrote:

    With all this talk of fundamentals being so solid, what I see is that the market does NOT expect the current sales growth, gross margins, and profitability to continue for Apple. If it did, then this stock would be trading a @ $800.

    What bothers me as an Apple investor is that the market COULD BE trading their future earnings at a 15 - 17 multiple. Our expectations could be much to optimistic.

  • Report this Comment On March 13, 2013, at 11:20 AM, 48ozhalfgallons wrote:

    The scotomization of Apple fans truly amuses me. The obvious fundamental which all iFans cannot seem to perceive is there is no moat deep or wide enough to protect from over priced, fad prone product. Apple is trying to play on two courts. One court of exclusivity such as Rolex; Ferrari; Ferretti; etc. The other court of trying to gain universality attracting the Walmart customer. A schizophrenic business model is surely doomed to extinction.

  • Report this Comment On March 13, 2013, at 11:41 AM, 48ozhalfgallons wrote:

    badsangria: The Forbes magazine writer suggesting from his point of view that Apple should consider buying McDonalds seems perfectly reasonable. Why not meld the iMac and BigMac?

  • Report this Comment On March 15, 2013, at 10:41 PM, WineHouse wrote:

    I'm a recovered Microsoft user. I learned by the painful route (bitter experience) that Microsoft's products, especially its operating systems, are deeply flawed. Furthermore, the incessant patches and fixes that MS kept sending over the net while I was trying to shut down my machine at bedtime -- which had an uncanny but predictable tendency to destabilize existing programs and mess up existing code -- only served to reinforce my feeling that "there HAS TO BE a better way!" I've found the better way -- Mountain Lion as my computer operating system (I got myself a gorgeous MacBook Pro), plus iOS for my little "baby" (an iPodTouch5). Oh WOW! While some things that Apple-folks think are "intuitively obvious" aren't, most of them are, and even if they aren't, they're STABLE and they work. My only unfulfilled wish is that Apple would provide USB or storage card ports for either increasing memory or downloading stuff. Until WiFi is both universally available and universally safe-and-secure (ha!), the Cloud is just that -- one's head up in the clouds -- definitely not something to be relied upon exclusively, especially for important stuff.

    As an investor, I "hedge my bets" by owning smaller stakes in more companies in each of the sectors in which I choose to invest. Thus, I don't just have Coca Cola; I also have Pepsi. I don't just have Kellogg; I also have General Mills and Smuckers and Kraft -- and I used to have Quaker Oats until that was no longer possible. I don't just have Colgate-Palmolive; I also have Proctor& Gamble, and Clorox, & Unilever (both British and Dutch), & Reckitt-Benckiser (if you've never heard of Reckitt-Benckiser, keep that to yourself, lest you make a fool of yourself). I don't just have Sherwin-Williams; I also have PPG & RPM Intl. I read blog posts by traders who announce that they've sold their entire stake in, say, SHW and moved the $$ over to PPG, and I don't know whether to laugh at or cry for them.

    At any rate -- I stuck with Newell-Rubbermaid through thin and thin, and now I'm being vindicated. Same for any of a number of other companies. And I plan to stick with Apple until there's a good reason -- a sound, fundamental reason -- to abandon ship (like I should have done with Eastman Kodak, but that's another story). Seems to me as if Tim Cook has enough good sense to ignore the noisy rabble-rousers out there. "I wanna have my shares split! I wanna have more dividends! I wanna have some chocolate milk! Waahhh!" And he's ignoring the more sinister ones also -- "if you don't throw away your cash hoards and give it all to me, I'll ruin your company!" So I say good for Tim Cook. Bravo. He's staying focused on the stuff he SHOULD be focused on. He shouldn't be messing with the long term best interests of the company just to appease a few quick-capital-gains junkies. He's doing what's best for the company long-term. And that sounds good to me.

  • Report this Comment On March 16, 2013, at 9:43 AM, XXF wrote:

    This isn't as complicated as people keep trying to make it. Apple has a hundred billion dollars invested in Treasury Bills yielding nothing. That money rightly belongs to the Apple shareholders who should have the choice to do with it as they wish, but it is not distributed. Why isn't it distributed? Because Apple has terrible governance with insiders and pseudo-insiders who are more interested in representing management's interests than shareholders'.

    Fundamental analysis takes into account the fundamentals and are my favorite way to value a company, but fall short when there are extra-fundamental influences affecting the stock's value.

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