After Breaking $400, Is Apple Headed to $320?

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The Apple (NASDAQ: AAPL  ) sell-off today has been utterly hopeless, with shares breaking through $400 for the first time in more than a year. The last time shares were worth less than four Benjamins was before Christmas 2011. Still, is even more pain in store? Could Apple head to $320 next?

That's the case that Creative Global is laying out, with founder and analyst Carlo Besenius adding insult to injury to Apple investors today. Besenius reads the charts, which tell him that $380 is a support level from a technical analysis standpoint, but he thinks the true bottom is even lower. Decelerating sales, deteriorating margins, and intensifying competition could push shares all the way down to $320 in the coming months.

Besenius' claim to fame is when he downgraded Apple to "sell" last October before shares cratered from all-time highs. Specifically, shares were trading around $685 at the time of his call, and two months later he assigned the Mac maker a price target of $420. In February, Besenius further dropped his price target to $320, so today's research note is more of a reiteration of that previous premonition.

I'd normally say that at $320, Apple would be trading at 7.3 times earnings or that its cash position would equal 46% of its market cap, but recent history shows that Apple's fundamentals are futile, since the stock trades purely on momentum and emotion these days.

The news that Cirrus Logic (NASDAQ: CRUS  ) expects lower iDevice volumes has caused both companies to plunge today. The data coming out of the audio-chip specialist lends some credibility to Besenius' pessimism, since Apple was responsible for 91% of sales in the previous quarter. iPhone weakness could definitely manifest itself in Cirrus Logic's results.

Not long ago, the idea that Apple might trade at $320 would have seemed ludicrous, in part because of the fundamentals. These days, anything seems possible, as Apple's upcoming earnings and difficult June guidance could further terrify investors into dumping their shares, while fundamental valuation will continue to be meaningless.

One of these days, fundamentals will matter again. In preparation of that day, investors are wondering whether Apple remains a buy from a fundamental perspective. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

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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 April 18, 2013, at 1:09 AM, ScottAtlanta wrote:

    Has anyone considered that people have set aside their greed and are deliberately killing Apple...out of spite and resentment?

    Or perhaps that the markets are manipulated by "other worldly places and forces" and Jobs is $%#'ing with everyone....testing who among us is faithful and loyal?

  • Report this Comment On April 18, 2013, at 12:01 PM, Mathman6577 wrote:

    Good comeback Velvet. We don't need any comments like bbry's here. He/she is probably just a hired gun anyway. Very unproductive and not value-added comments to say the least.

    I don't think the short sellers are paying any attention to the fundamentals at all .... they are just trading on news and rumors. I wouldn't trust them with my money.

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9/29/2016 1:05 PM
AAPL $112.13 Down -1.82 -1.60%
Apple CAPS Rating: ****
CRUS $50.84 Down -0.99 -1.91%
Cirrus Logic CAPS Rating: ****