Chris O’Brien of The L.A. Times look at Apple’s recent stock volatility. Talking to Howard Silverblatt, a senior index analyst for S&P Dow Jones Indices:
Silverblatt said the only company that has come close to having such a strong influence on the broader stock markets since World War II is IBM in the early 1980s, when the PC revolution was just getting started. But not only is the value of Apple’s stock remarkable, so is its volatility. Such large stocks rarely have such big, quick swings.
Apple’s stock briefly dipped below $500-a-share this morning, which is crazy considering it was above $700 in September. And on the surface, there doesn’t appear to be an obvious reason for the downward swing. But as O’Brien explains, a huge swath of institutional investors now own the stock and their actions, often driven by fund goals, drive swings.
Last year, I was super-bullish on Apple’s stock following an earnings miss because it was clear that most analysts were missing something obvious — and that Q1 would be a blow-out, as it was. This year, it’s decidedly more murky. Q1 is still going to be massive for Apple, probably their biggest ever, but people are expecting more.
Still, Apple around $500 seems like an absolute steal (their P/E is half of Google’s). No, I don’t own any Apple stock, but if it actually goes below $500, I’ll have to consider it because I’m a sane person.
Wall street likes growth, they don’t care about profit. Is Apple growing? MSFT has been making mountains of money over the past decade, but their stock is flat because they stopped growing. Google’s price may be inflated because Wall Street is betting that Google will be opening new profitable markets in the next few years. Not seeing that in Apple.