Just two days before the iPhone 5 hit the shelves, it happened: AAPL stocks began to fall. Since that day, September 19, shares are 25 percent lower, closing at a six-month low on November 15. They are still up 30 percent for the year as a whole, but nowhere near the 74 percent increase noted months ago. They say all good things must come to an end, but is this truly the end? Probably not.
According to Yahoo Finance, more and more analysts are recommending the purchase of AAPL as compared to last month, as well as three months ago. However, at Thursday's price of $525.62 a share, it's still pricey for most. This may be the problem, as the only way for a stock price to rise is for new investors to enter the picture. As of now, that just isn't happening.
Downward Spiral, or Unjustified Panic?
CNBC points out that the majority of Apple's stockholders are comprised of mutual and hedge funds. For reasons which remain a mystery, these stockholders are selling their shares. With these funds put back on the table, with no one backing them, it is only natural the stock price will decline.
However, if you look a bit more closely, you'll see that CNBC is taking their speculation a bit too far. If you look at the volume for the past three years, you'll note Apple's stability. The stock price will likely fall slowly over a longer period of time. At this time, it would be unwise to worry and dump AAPL stock in a panic.
The highly anticipated iPhone 5 showed us that everything was as it should be. As is usual, markets always anticipate the release of any new product, which is reflected in its stock price. Between July 2 and September 19, Apple's stock price rose 18 percent.
If you take a look at the ratio market capitalization over revenue, you'll note it has increased for Q3 and Q4 2012. It isn't yet safe to say what direction the stock will head for Q1 2013, but Apple is predicting it will receive its largest revenue since the beginning of the company.
With the new releases just in time for the holidays like the iPad mini, the new lineup of iPods, new iPad, iPhone 5, iMac, Mac mini, and MacBook Pro, there is certainly a silver lining ahead for the company. There is no doubt Apple's Q1 2013 revenue will be quite impressive, given they've released so many new products in such a short amount of time. In fact, it could bring mutual and hedge funds back.
The bottomline: it's still business as usual at Apple, where their balance sheet looks the same and the products are highly sought after. There aren't many experts who would tell you Nexus is the next Apple. You can safely bet the iPad mini will be a top wish list item this holiday season, and that the iPhone 5, just like its predecessors, will outsell all other smartphones.
Although it may be business as usual, people look differently on Apple than they used to. Where they used to be the little guy, trying fight their way into the computer world and make their way into homes across the world, they are now the big dog. They are what products not bearing their name or logo dream to be.
That said, there's no need to worry about the price of Apple's stock and how far it has dropped since September. A smart investor does not judge a company by the price of its stock. Consumers still want Apple's products, now more than ever, and that's what really matters.