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AAPL Stock: 101.2 ( + 1.09 )

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AAPL 2012: despite declines, stock is up 30 percent

updated 11:48 pm EST, Mon December 31, 2012

China worries, 'fiscal cliff' drive stock down in Q4

Apple finished the calendar year in 2012 with a strong lineup of holiday products, including a (wisely, as it turned out) refreshed iPad lineup that became the top-selling tech gift of the year. From a stock perspective, the last three months have been tumultuous for investors, however even with the recent drop of 27 percent, the company finished the year with a nearly 30 percent gain and is still the most valuable traded company in the world.

Fears of capital-gains tax hikes and perceptions (that remain yet to be confirmed) that the iPhone 5 has under-performed compared to the growth spurt seen by the release of the 4S the year before have helped to drive the stock down since the beginning of October. AAPL hit an all-time high of just over $700 per share in mid-September, ending a prolonged run-up of the price that had threatened to double the company's price in a single year. Most analysts are retaining estimates of close to $900 a share for a 2013 target.

At present, some feel the stock's price represents a buying opportunity, given both the drop in price at its low price-to-earnings (P/E) ratio of under 12. In particular, if the new year sees the arrival of any all-new Apple products -- such as the long-rumored HDTV set -- that do well in the market, the company's stock could well be undervalued. There is little indication that any of its three existing core businesses -- the iPhone, the iPad and the Mac -- are in any danger of peaking, and the company continues to be exceedingly cash-rich despite the initiation of a shareholder dividend and stock buyback program.

The sell-off in AAPL, due to an expected change in capital-gains rates for long-term investors (jumping from the current low of 15 percent to 25 percent) and even short-term investors (changing from zero to 10 percent) prompted many to lock in gains from the last few years -- which have been nearly unprecedented, particularly given the troubled US economy. An investor who purchased 1,000 shares of Apple stock four years ago today would have seen a return of 486.41 percent, and a pre-tax profit of $441,420 on an investment of just over $90,000.

The stock officially finished the year with a last-minute rally to $532.17, where it had spent the last week hovering around the $510 mark. Though there are very few who seriously believe the company won't have another record-breaking quarter when the company's fiscal Q1 results are reported in late January, the areas in which Apple does well and how its products hold up against increased competition -- particularly in the tablet space -- will be under close scrutiny by analysts to determine if the company can continue to dominate its key markets, and grow at the pace it has set for itself over the past few years.

By comparison, Microsoft's stock grew at a rate of just two percent for the year, and Google finished the year up only 9.5 percent. The overall Dow Jones Industrial Average closed 2012 up only six percent, while the NASDAQ average did more than twice as well at 16 percent growth. Still, the stronger market is a sign of a slowly-improving economy -- which will benefit Apple and its rivals as it brings new offerings to consumers and businesses in 2013.




by MacNN Staff

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Comments

  1. lkrupp

    Junior Member

    Joined: 05-13-01

    So all the trolling by Apple haters on Apple centric sites was just F.U.D? All the predictions of doom and failure were just the wet dreams of people who irrationally hate the company? AAPL closed UP 30% in 2012? All we heard about was that AAPL LOST 27%. You mean if I owned AAPL at the beginning of 2012 I actually MADE money and lots of it? All the talk about sales slowdowns, the "dominance" of Android, all of that was just bullish!t put out by crazies?

    It would appear so. :lol:

  1. iphonerulez

    Dedicated MacNNer

    Joined: 11-28-08

    What a joke. Apple up 30% for the year. Supposedly, Apple is the king of the hill, the talk of the town. No debt, huge amounts of reserve cash, offers a decent dividend, selling products like no tomorrow. Apple might make revenue close to $50 billion this quarter. And the stock was up only 27%. I wish they'd stop boasting about Apple stock. Bend over Apple shareholders, because you got totally reamed by Jeff Bezos and Wall Street. :thumbsdow Stuck with Tim Cook instead of a CEO that knows how to get shareholder value out of a company.

    Amazon, on the other hand, is up 44% for the year. :thumbsup: With a P/E of 3500. Amazon will never be able to make that much in the way of earnings in a thousand years. The company has debt, a tiny amount of reserve cash and makes little in the way of profits... And yet the stock is running rings around mighty Apple. Amazon shareholders are dancing and singing because they picked a better company as their investment. Amazon shareholders got a Teflon-coated investment that's immune to "fiscal cliffs" and weak earnings. Thanks to Jeff Bezos and his slight of hand tricks, he was able to turn Amazon into a better investment for shareholders than the supposedly rich-beyond-means Apple.

    When compared to tiny Amazon making huge stock price gains, it's no wonder that Apple shareholders are crying about Wall Street turning their $700 shares into $500 shares in the blink of an eye. Apple's weak P/E is shrinking as I'm writing this comment. The P/E always shrinking is the only consistent thing about owning Apple stock. Let's hear no more nonsense from Apple bulls how Apple is a better investment than Amazon. Reality shows otherwise. Apple will probably never see $700 again as Wall Street is absolutely certain Apple will be put out of business by cheap Android products in the next couple of years. Amazon is on its way to $300 a share with the company losing money all the way. :lol:

    /s

  1. chas_m

    MacNN Staff

    Joined: 08-04-01

    Originally Posted by iphonerulezView Post

    What a joke. Apple up 30% for the year.



    Yes, it is. It opened 2012 at $405 or so and closed at $532 and change. Some part of the math there you're having trouble with?

    Amazon, on the other hand, is up 44% for the year.

    It isn't, actually. It's up 40.13%, not 44%.
    http://finance.yahoo.com/echarts?s=AMZN+Interactive#symbol=amzn;range=1y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

    But so what? Huzzah for them! I don't have a problem with other companies having good stock years, what difference does it make? Apple and Amazon don't really compete except in one VERY minor (in terms of overall income) area. Both companies had good years. If Apple's stock hadn't had this strange dip in the last three months, it would have seen a 70 percent gain for the year. Would we have "won" over Amazon then? :confused:

    And yet the stock is running rings around mighty Apple.

    Um, no it isn't. You may want to get some Rose-Colour remover for those glasses.

    Oh wait, I get it. You're a day-trader trying to manipulate weak minds. Got it. Okay, noted.


    Apple will probably never see $700 again

    Since you're such a guru with money, would you care to make a friendly wager on that?

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